Balloon payment in Ch 13 plan for a lien on home from com=
Posted: Wed Aug 01, 2012 12:05 pm
not likely this would be confirmed. Plans have to be feasible to be confirmed. Where will this debtor get $500k?
Till requires the bk court to add points to prime to consider the bk debtor's risk. Here the loan is 100% of the value, so risk is high. expect at least 3 points to be added to prime, and maybe more.
ch 11 is only better if you can show there is a feasible source of payment of the loan.
Since the loan is commercial, you will not likely be able to amortize over any more than 10 years, so debtor will still be facing a balloon.
What is the source of funds to pay the balloon?
d
________________________________
To: cdcbaa@yahoogroups.com
Sent: Wednesday, August 1, 2012 11:46 AM
Subject: [cdcbaa] Balloon payment in Ch 13 plan for a lien on home from commercial loan
Client owns a home worth ~750k in a very desirable neighborhood. First mortgage is only 250k. There is a "second" deed of trust from a guarantee for a commercial loan for $500k, which is not a debt secured by home only. Client wants to keep the home. The 2td bank had sold the defaulted note to a third party who is foreclosing on the home.
Since the 2nd TD is not a debt secured by home only, can I propose a plan modifying the 2td for 500k to be paid interest only for 59 payments at the prime interest rate and toward the end of the plan with a balloon note for the entire balance? Would the LA trustees go for this? Should I instead persuade the client to file CH 11 if he really wants to keep the home?
not likely this would be confirmed. Plans have to be feasible to be confirmed. Where will this debtor get $500k? Till requires the bk court to add points to prime to consider the bk debtor's risk. Here the loan is 100% of the value, so risk is high. expect at least 3 points to be added to prime, and maybe more.ch 11 is only better if you can show there is a feasible source of payment of the loan. Since the loan is commercial, you will not likely be able to amortize over any more than 10 years, so debtor will still be facing a balloon.What is the source of funds to pay the balloon?d
From: Jaenam Coe <jaenamcoe@yahoo.com> To: cdcbaa@yahoogroups.com Sent: Wednesday, August 1, 2012 11:46 AM Subject: [cdcbaa] Balloon payment in Ch 13 plan for a lien on home from commercial loan
Client owns a home worth ~750k in a very desirable neighborhood. First mortgage is only 250k. There is a "second" deed of trust from a guarantee for a commercial loan for $500k, which is not a debt secured by home only. Client wants to keep the home. The 2td bank had sold the defaulted note to a third party who is foreclosing on the home. Since the 2nd TD is not a debt secured by home only, can I propose a plan modifying the 2td for 500k to be paid interest only for 59 payments at the prime interest rate and toward the end of the plan with a balloon note for the entire balance? Would the LA trustees go for this? Should I instead persuade the client to file CH 11 if he really wants to keep the home?
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