Page 608 - WhyAsInY

Why (as in yaverbaum)
outside counsel; I knew from having been the general counsel at Coronet that it certainly was not my stellar personality that was working magic.
Perhaps my greatest success was in the creation and development of a mechanism for the sale of billions of dollars of moribund land and mortgages on land that was located primarily in Texas, the Southwest, and Florida, regions that had been hit hardest by the collapse of real estate values and the S&Ls. Land, as I noted earlier, is a difficult asset to sell and an expensive asset to hold. It produces income only after con- struction is planned, approved, and completed, and after the resulting assets are put into service. That occurs, if at all, in a risky process that may take years. Land is not, therefore, easily financed in the absence of a credible plan for development that is formulated by a well-capitalized and experienced builder.
The RTC had tried various techniques to sell its land, but it was time-consuming and expensive to sell land parcel by parcel, and there were few interested purchasers for cash. Little of the inventory moved. The RTC had tried to enhance the sales process by providing what is known as ”seller financing,” a process in which the seller takes a small portion of the sales price in cash and, in effect, lends the balance of the price to the buyer, retaining a mortgage. The seller then defers repay- ment while the purchaser develops a plan of building that the purchaser hopes—and therefore the seller hopes—will entice both a construction lender to come along with moneys sufficient to bring the project to fru- ition and a “permanent” lender to provide long-term financing when the project is up and running. Still, by relying on seller financing, the RTC was proceeding parcel by parcel in a largely unproductive and personnel-intensive process.
The dilemma was shifted to new blood in the National Sales Cen- ter. The Sales Center decided that I should be the legal advisor to whatever new effort was undertaken. In my view, if the RTC were to provide a financing mechanism, it should avoid the necessity of making a separate loan available with respect to each piece of land. I brought to bear all of my learning concerning development and finance; I proposed that instead of being a lender, the RTC should be a partner in the
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