The Persecution of Donald Trump Means Turning Ordinary Activities Into Crimes

In December 2020 I had to put my home on the market and move 1,000 miles away.  Two months before I’d considered refinancing my mortgage and the bank gave me a valuation of $285,000. I thought it probably should have been higher but didn’t really feel like taking the time to look into it because I wasn’t really that worried about it.

Suddenly in December I was forced to worry about it.  So I reached out to a realtor friend (an actual realtor, not a guy with a side gig) and asked him to give me an estimate. He thought it would probably sell for about $305,000, maybe $315,000 tops.  Again I was skeptical, so I started doing my own research.  I looked at my community, what was available in my county, what comparable houses were selling for and taking note of the neighborhoods, roadways, schools etc. After all of that I estimated my house was worth about $400,000.  I thought it could possibly sell for $415,000 or even a bit more.

We put it on the market at $405,000 and ten days later it was sold with the buyers offering $395,000, and we eventually settled for $400,000. I was confident it could have sold for more but exigent circumstances made the logistics of waiting impossible, which is sad because had I waited 12 months to sell it I would likely have gone for $550,000, almost twice what I’d been originally offered.

All of this to say that in the world of real estate there are a million different factors that go into valuing something and based on those criteria, there are likely countless different values that can be set on a particular property. What’s more, values can be volatile, particularly in the high-end markets.

Real estate, like most businesses, can be unpredictable, sometimes very much so. Which makes what NY AG Letitia James has done to Donald Trump so unconscionable. In the primary element of James’ indictment: “’Trump and his company used “false and misleading” financial statements, her lawsuit alleged, “repeatedly and persistently to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, and to induce insurers to provide insurance coverage for higher limits and at lower premiums.’”

One would imagine that some banks or insurance companies lost money because they loaned money to Trump or Trump defaulted on them.  They did not. Indeed, the loans were all paid back, with interest.  There were literally no victims and banks still wanted to lend to him!

But that didn’t matter.  The bottom line is that, according to James, Trump used one set of books for getting a loan and another set of books for taxes. But that’s not how this works.

When I was selling my house the county tax collector assessed my home at around $200,000.  It had been that way for years.  Indeed, it’s very common, particularly in red states where they concern themselves with controlling taxes, for the government assessment of the value of a property to be substantially below what it might sell for.  That didn’t impact what I might refinance it for or what a buyer might pay for it.  In those cases the lender sends someone out to do an inspection and then comes to its own conclusion as to what value it would be willing to assign the property for the purposes of a loan.

In the case of Trump, in 2011 the local property assessor in Palm Beach County had valued his Mar-a-Lago property at $18 million then $27.6 million in 2021.  AJ James indicted Trump because he valued the property at higher valuations during this time, up to $739 million for collateral purposes, and therefore using a fraudulent valuation to obtain loans he wouldn’t otherwise get.  But here’s the thing, according to a banker involved in the transaction, the bank followed its own guidelines to make the loans, stating “I think we expect clients-provided information to be accurate. At the same time, it’s not an industry standard that these statements be audited. They’re largely reliant on the use of estimates,” so bankers routinely “make some adjustments.” To highlight the disparity, this past December a high-end Palm Beach real estate broker stated that in 2021 Mar-a-Lago would have been worth slightly more than $1 billion and likely would have valued it at $655 million in 2011.

The point here is that Trump was simply doing the same thing that millions of homeowners and businesses do every single day across the country. They make the best case scenario for the value of their property of business while knowing that a banker or lender is going to make their own determinations before deciding how much they will lend.

That’s business. Valuations are just estimates, and they can be all over the map in business.  In 2000 Spanish telephone company Terra bought the search engine Lycos for $12 billion.  They unloaded it three years later for $95 million at a loss of 99%! Alternatively, in 1999 founders Larry Page and Sergey Brin offered to sell Google to Alta Vista for $750,000.  George Bell the CEO demurred.  The company went public in 2004 with a valuation of $23 billion and today Google is worth almost $2 trillion.

This content is a work of satire and parody. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. Any opinions expressed in this content do not reflect the views of the author or publisher. In fact, they probably reflect the opposite of the views of the author or publisher. The purpose of this content is to entertain and possibly make you question the reality of the world around you. So please, don't take anything too seriously, unless it's the importance of a good laugh.
President Trump Travels to Texas by shealah_craighead is licensed under Flicr

Get latest news delivered daily!

We will send you breaking news right to your inbox

© 2024