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You say it would be ludicrous for banks to be able to recall debt based on their assessment of the value, but it isn't far off from normal lending practices for
by jjeaff 4y ago
You say it would be ludicrous for banks to be able to recall debt based on their assessment of the value, but it isn't far off from normal lending practices for commercial real estate where the bank can just decide that your property has fallen below an arbitrary threshold and require you to pay back a portion of the loan immediately.
- snake_doc 4y agoMortgages are not typically corporate debt. Mortgages are by definition collateralized. Therefore, there are covenants triggers related to the value of the collateral. The vast majority of corporate debt (bonds) is unsecured. There is no collateral. https://corpgov.law.harvard.edu/2020/01/27/the-decline-in-secured-debt/ https://corpgov.law.harvard.edu/2020/01/27/the-decline-in-se...