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RBS refused to disclose details of secondary loan purchases, citing client confidentiality.
The Government of Singapore Investment Corporation, which made a $575 million secondary loan, and invested as much as $200 million in equity, stands to lose all of that.
But with the real estate bubble in full expansion, he was able to line up a $20 million loan from Canyon Capital Realty Advisors and a secondary loan from Oaktree Capital Management to buy the Edison.
Indian Land sought to go through with the foreclosure and dismiss the counterclaim from Fonville & Co., saying Fonville & Co. had willingly subordinated its secondary loan to the primary mortgage.
Conventional mortgage: A mortgage offered by a lender that will probably be bought on the secondary loan market by Fannie Mae or Freddie Mac; these loans have an upper limit of $625,500.
A couple of years later, in the face of recession, the Kushners were forced to sell a stake in the building to cover a secondary loan on the property.
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The proceeds were used to pay off secondary loans on the building, not the main mortgage.
The two partners bought a $300 million swath of secondary loans on the Manhattan complexes for $45 million.
Presumably, there is nothing left to pay off the secondary loans.
The Congressional Budget Office estimates that about 40percentt of riskier mortgages made in recent years are coupled with such secondary loans.
On Jan . 8 the owners defaulted on $4.4 billion in loans ($3 billion in senior mortgages and $1.4 billion in secondary loans).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com