.jpg)
Interest rate on Cramdown of Rental Property Chapter 13
I have successfully used 4.75%in Ch13 Plans (and Ch11 Plans). I used to use5.25%.
I have never had an objection to my interest rate go to a hearingso I'm not sure how a judge rules when it is contested.
Henry Paloci, Esq.
805.498.5500
The post was migrated from Yahoo.
Hi Link and Dennis:
The Debtors have a rental property that they want to pay off in five years.
So they are doing a "Cramdown" and they have a 2nd so they are also doing
a Lien Strip. So yes we are paying the FMV of the mortgage over five
years. So while this is a risky loan, they will get paid in five years as
opposed to carrying the loan for a much greater period of time. So I
thought the shortened time on the loan would help offset some of the risk.
Thank you both for your replies. I am very grateful.
Renay
On Mon, Aug 13, 2012 at 10:51 AM, Dennis McGoldrick wrote:
> **
>
>
> Grace:
>
> till requires a 1 to 3 percent addition to prime.
> Your use of cramdown is confusing me. Do you mean stripdown?
> What are you stripping down? It appears you are trying to strip down a
> rental property? Are you going to pay the entire stripped down mortgage
> over five years?
>
> Greater creditor risk is compensated by greater interest. When using a
> stripdown, the creditor is generally being forced to carry a 100% loan to
> value note (from a bankrupt debtor). That is the most risky loan
> imaginable. I would be happy for 5.75% in this circumstance.
>
> I would expect Judge Kaufman to rule for the creditor.
>
> d
>
>
> ------------------------------
> *From:* R Grace Rodriguez
> *To:* cdcbaa@yahoogroups.com
> *Sent:* Monday, August 13, 2012 10:13 AM
>
> *Subject:* [cdcbaa] Interest rate on Cramdown of Rental Property Chapter
> 13
>
>
> Dear Members:
>
> Filed a motion to value. Filed Plan at 2% interest on the cramdown value.
>
> Got opposition to Motion asking for 5.75%
>
> I'm in Judge Kaufman's court.
>
> Any recommendations on either REPLYING asking for lower than 5.75 or
> taking it to evidentiary hearing which in the long run may result in a lot
> of money being saved. Anyone know where Kaufman is at on rates?
>
> Thanks for info in advance.
>
> --
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
> NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
> for ex parte Applications via voicemail or by email. You must comply with
> California Law and give notice to a person in my office during regular
> business hours.
>
> CONFIDENTIALITY STATEMENT: This message contains privileged and
> confidential information and is intended only for the individual named. If
> you are not the intended recipient you should not disseminate, distribute,
> store, print, copy or deliver this message. Please notify the sender
> immediately by e-mail if you have received this e-mail by mistake and
> delete this e-mail from your system.
>
>
>
>
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and
delete this e-mail from your system.
Hi Link and Dennis:The Debtors have a rental property that they want to pay off in five years. So they are doing a "Cramdown" and they have a 2nd so they are also doing a Lien Strip. So yes we are paying the FMV of the mortgage over five years. So while this is a risky loan, they will get paid in five years as opposed to carrying the loan for a much greater period of time. So I thought the shortened time on the loan would help offset some of the risk.
Thank you both for your replies. I am very grateful.RenayOn Mon, Aug 13, 2012 at 10:51 AM, Dennis McGoldrick <easky1@yahoo.com> wrote:
The post was migrated from Yahoo.
Grace:
till requires a 1 to 3 percent addition to prime.
Your use of cramdown is confusing me. Do you mean stripdown?
What are you stripping down? It appears you are trying to strip down a rental property? Are you going to pay the entire stripped down mortgage over five years?
Greater creditor risk is compensated by greater interest. When using a stripdown, the creditor is generally being forced to carry a 100% loan to value note (from a bankrupt debtor). That is the most risky loan imaginable. I would be happy for 5.75% in this circumstance.
I would expect Judge Kaufman to rule for the creditor.
d
________________________________
To: cdcbaa@yahoogroups.com
Sent: Monday, August 13, 2012 10:13 AM
Subject: [cdcbaa] Interest rate on Cramdown of Rental Property Chapter 13
Dear Members:
Filed a motion to value. Filed Plan at 2% interest on the cramdown value.
Got opposition to Motion asking for 5.75%
I'm in Judge Kaufman's court.
Any recommendations on either REPLYING asking for lower than 5.75 or taking it to evidentiary hearing which in the long run may result in a lot of money being saved. Anyone know where Kaufman is at on rates?
Thanks for info in advance.
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice for ex parte Applications via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
The post was migrated from Yahoo.
Grace:
I recently included the following analysis in an argument to reduce the interest rate on a mortgage from 9.30% to 5.75%. The creditor had refused to discuss any rate reduction, but after I filed the motion it stipulated to 5.75%. My suggestion would be to succinctly state your reasons why 2% should be allowed. If your reasoning is sound, you should be able to avoid an evidentiary hearing. However, you may discover that a 2% rate is not defendable when you add on a risk adjustment. I would not simply rely on Judge Kauffman's past rulings, especially if you have a creditor who is fighting the rate reduction.
Here is what I used:
[Note Regarding Interest Rate Selection: When the Progressive Note was executed in March 2007 the LIBOR one-month rate was 5.3195. The LIBOR one-month rate in May 2012 is 0.2389. The difference between these rates is 5.0806. The contract rate in the Progressive Note is 9.300%. Subtracting the difference between LIBOR one-month rates from the Progressive Note rate yields a comparable rate of 4.2194. To this rate was added a risk adjustment of 1.5306, to arrive at the Plan rate of 5.75%. In Till Et Ux. V. SCS Credit Corp., 541, U.S. 465 (2004), a leading case on setting interest rates in plans of reorganization, the U.S. Supreme Court noted that the Bankruptcy Court in that case had approved a risk adjustment of 1.5% and that other courts have generally approved adjustments of 1% to 3%. Till at 480. It should also be noted that the original contract term was for 30 years and that under the Plan, U.S. Bank's secured claim will be paid in 10 years.]
Link Schrader, Attorney
Law Office of Link W. Schrader
The post was migrated from Yahoo.
Its supposed to be the "Till" rate. (In re Till) prime + a few points for risk involved to creditor. I doubt you will succeed in getting 2%.
Donna R. Dishbak, Esq.
Simon & Resnik, LLP
15233 Ventura Blvd., Suite 300
Sherman Oaks, CA 91403
Telephone: 818-783-6251
Fax: 818-783-6253
donna@simonresniklaw.com
THIS TRANSMISSION IS INTENDED ONLY FOR THE USE OF THE ADDRESSEE AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF YOU ARE NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US BY TELEPHONE, AND RETURN THE ORIGINAL MESSAGE TO US AT THE ABOVE E-MAIL ADDRESS.
The post was migrated from Yahoo.
Dear Members:
Filed a motion to value. Filed Plan at 2% interest on the cramdown value.
Got opposition to Motion asking for 5.75%
I'm in Judge Kaufman's court.
Any recommendations on either REPLYING asking for lower than 5.75 or taking
it to evidentiary hearing which in the long run may result in a lot of
money being saved. Anyone know where Kaufman is at on rates?
Thanks for info in advance.
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept e-mail notice
for ex parte Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and
delete this e-mail from your system.
Dear Members:Filed a motion to value. Filed Plan at 2% interest on the cramdown value.Got opposition to
The post was migrated from Yahoo.