GE taking major loss on sale to Santander

GE taking major loss on sale to Santander


The assumption of debt still leaves GE on the hook. It will be up to the buyer to get what it can out of these assets and stands profit handsomely if they can restructure the debt at 40% of the original value. As companies like GE unload their mortgage debt there is no reason for a delay in loan modifications. GE was bailed out by the tarp and now getting pennies on the dollar for assets that should have been sold 2 or 3 years ago. The hold and hope fantasy of the major players seems to be coming to an end. Unfortunately it has been at the expense of the overall economy, homeowners and the taxpayer.

The TARP was basically given as a gift with no strings attached after the treasury sold the story that it would allow toxic assets to be purged to allow the financial system to warm again.

The banks and larger institutions like GE, decided to sit on their hands for several years and it put the economy in worse shape that it would have been had these companies been forced to liquidate without federal bailout funds.
“It is a buyer's deal, as the seller remains at risk and the business will cash flow the payment stream and thus, the acquisition According to Don Todrin's Hub Pages. However, when the seller is burned out, ready to walk away, out of money and unable to operate and searching for a way out, this type of loan workouts work very well.”

Community Reinvestment Performance: Making Cra Work for Banks, Communities and Regulators
He further states that this assumption of debt is an empty promise and often results in default.
The Essentials of Risk Management, Chapter 3 - Banks and Their Regulators--The Research Lab for Risk Management?


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