Posted by John Behle on March 08, 2000 at 13:13:42:
It all depends on what the bank perceives as their position. I’ve seen times when they were poorly collateralized and didn’t think so or were very well secured and still took a large discount. There is no set rule or situation.
The fact that it is the second time they would be taking the property back is BIG. They may be absolutely averse to getting this property again due to that. A deal we did a few years ago was just that. An insurance company took back a motel. Then they sold it and financed it to the new buyer. He never made a payment.
Even though they were fairly well secured they took a 50% discount and financed the purchase of their own note.