this post was submitted on 20 Mar 2024
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[–] halcyoncmdr 28 points 8 months ago (3 children)

Not the government directly, from my understanding the loan payment comes from the sale amount, before it is applied to the judgment. The property would end up being sold, then minus any outstanding debts on the property, and the remainder applies towards the judgment.

Outstanding loans must still be repaid, creditors don't get screwed just because it's part of a court judgment and seizure, in fact they get an immediate return. Depending on the loan agreement, if there are prepayment penalties for those loans... those would likely apply as well.

So it is technically possible it seems, with Trump's fraudulent property valuations for loans, that he could end up with a negative overall return by selling various highly leveraged property. If they fraudulently valued something at say $600M and got a loan for $500M based on that... but the property is actually valued and sells for $300M, that loan would be underwater, like millions of American homes. He would still owe $200M for that loan, but would no longer have the property.

If all of his properties are massively overvalued and highly leveraged against, he could end up with basically nothing left from this. Forced to declare personal bankruptcy and losing all the real estate. Court judgments for fraud very rarely can be discharged by bankruptcy, so while other debts might be discharged the penalties will likely all apply, regardless.

I believe the sales would count as income for tax purposes next year as well. Just to be another kick in the nuts.

[–] [email protected] 38 points 8 months ago

If all of his properties are massively overvalued and highly leveraged against, he could end up with basically nothing left from this. Forced to declare personal bankruptcy and losing all the real estate.

[–] michaelmrose 5 points 8 months ago (2 children)

Here is an interesting question in the example case where he owes 500M on a 300M property ergo negative equity can the government still force the sale when the expected return is negative ergo the government expects to get nothing? Alternatively are seizures irrespective of expected return and if it turns out to be overvalued it's his problem?

[–] [email protected] 10 points 8 months ago

The government forces the sale and facilitates, they do not take the face value. This can be a real shit show.

A smart person should never allow the government to do the sale. These things should have been for sale months ago.

[–] Maggoty 3 points 8 months ago (2 children)

The government gets the money from the sale. If the sale is worth more than he owes the government, then he gets the extra. Trump is left to pay the loans off himself.

If this is as bad as the newspapers are saying then his creditors are already counting everything up and waiting for him to miss a payment so they can take whatever the government doesn't. In some states they may be able to use this fraud ruling to demand the entire loan amount back immediately.

[–] michaelmrose 3 points 8 months ago (1 children)

I do believe the people previously loaning money on the property get paid BEFORE the government so the net effect of seizure isn't seizure FROM innocent parties. So if he owes 100M on a 80M property I'm wondering if the seizure goes through at all as there is no value to seize. if he owes 80M on a 100M property the government gets the 20M and keeps taking his shit. I suspect that the government ends up seizing a broad swath of property and holds it while they figure out what they have actually gotten and it takes months to actually shake out. I think if he's under water he'll end up losing it by virtue of being under water in the loan. In WA understandably a different state this is an issue with commercial property. If its revalued at less than the loan the loan can be called.

[–] Maggoty -1 points 8 months ago

I'm sure it's all very complicated. I was just talking about the simple facts we're all here to celebrate.

[–] [email protected] 2 points 8 months ago

I'd like to see Donald send his Trumpanzee cult against the banks. We'll see the justice system magically start working, and swiftly, if he endangers billionaires or their profits.

[–] [email protected] 2 points 8 months ago

This sounds like it wouldn't be just another bankruptcy, either. He's gone through the bankruptcy process before. Lots of businesses do as a strategic move. He could end up with absolutely nothing after this, and even if he lived for another few decades (unlikely), he has no foundation for rebuilding.