WHEN the first wave of co-op conversions began in the New York area some 15 years ago it was believed to be foolhardy to pay off the underlying mortgage (or, in some cases, multiple mortgages) still attached to the building.Shareholders gained significant tax advantages by keeping this debt alive.Typically, customer accounts are closed and checks are mailed to account holders for the amount of their insured deposits.In a typical bank failure and sale, you may see a different name on the bank’s door and some changes to your account’s terms and conditions, but you don’t have to do much to keep money flowing in and out of your checking account.An insolvent company remains listed on the credit file of the directors, even after it has been deregistered.So how can the former directors with a blemished credit history apply for home loans or other mortgages?
takes on the defunct bank’s troubled assets, a healthy bank buys the rest, and customers’ accounts keep right on going.
uses a combined pledge of real estate and margin-eligible securities in the clients' Raymond James investment account.
This allows clients to finance up to 100% of the purchase price of a primary home, secondary home or residential investment property. Unless otherwise specified, products purchased from or held at Raymond James & Associates or Raymond James Financial Services are not insured by the FDIC, are not deposits or other obligations of Raymond James Bank, are not guaranteed by Raymond James Bank and are subject to investment risks, including possible loss of the principal invested.
"Lenders even fought over the chance to refinance," she said.
But after the savings-and-loan crisis, the drop in real estate values and the wave of sponsor defaults "lenders became more careful about where they placed their money," she said.