Rushmore Case
Kevin – RMS has reviewed the analysis provided on the 2 loans reference below that either Rushmore and/or counsel allowed the redemption in an amount well below the approved bid. While we appreciate the “investor loss analysis” provided, certain factors were ignored or were not considered, while other assumptions were arbitrary and unsupportable under the circumstances (all to the detriment of the investor). First, RMS does not utilize Rushmore’s BPO value when determining a foreclosure bid. We have a thorough review process that may consider Rushmore’s BPO value, but as Rushmore well knows, RMS utilizes our internal valuation for all economic decisions, including setting a foreclosure bid. Second, any foreclosure bid approved by
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There are constant changes in the market, both up and down. In fact, as part of our review of Rushmore’s analysis, RMS obtained an independent opinion of value on both properties and in both cases, the independent valuation was higher than the Rushmore value (and even our value), one modestly and the other more significantly. Furthermore, the use of the lower of the 90% of the bid amount or 90% of list price to determine expected sales price is also arbitrary and used only for the benefit of Rushmore and/or counsel (and again, to the detriment of the investor). The foreclosure bid amount after the foreclosure sale has no relationship to what the sales price may be when the asset is sold and in this case the sales price can only be determined after interior inspection or possession of the property. Investors have the opportunity for both upside and downside on their pre-foreclosure value. Both of these properties are in good condition with no noted issues or repairs, appear well maintained, are in nice neighborhoods and the post-foreclosure BPOs reflect the values have increased on both properties. In both of these cases, Rushmore and/or counsel failed to comply with the approved and authorized bids and allowed the properties to be redeemed significantly below the bid amounts. While we appreciate that these errors appear to be counsel’s responsibility, Rushmore is responsible for any
There are constant changes in the market, both up and down. In fact, as part of our review of Rushmore’s analysis, RMS obtained an independent opinion of value on both properties and in both cases, the independent valuation was higher than the Rushmore value (and even our value), one modestly and the other more significantly. Furthermore, the use of the lower of the 90% of the bid amount or 90% of list price to determine expected sales price is also arbitrary and used only for the benefit of Rushmore and/or counsel (and again, to the detriment of the investor). The foreclosure bid amount after the foreclosure sale has no relationship to what the sales price may be when the asset is sold and in this case the sales price can only be determined after interior inspection or possession of the property. Investors have the opportunity for both upside and downside on their pre-foreclosure value. Both of these properties are in good condition with no noted issues or repairs, appear well maintained, are in nice neighborhoods and the post-foreclosure BPOs reflect the values have increased on both properties. In both of these cases, Rushmore and/or counsel failed to comply with the approved and authorized bids and allowed the properties to be redeemed significantly below the bid amounts. While we appreciate that these errors appear to be counsel’s responsibility, Rushmore is responsible for any