tag:blogger.com,1999:blog-3210378500200629631.post3219334281979964446..comments2023-11-06T00:09:38.672-08:00Comments on Mase: Economics and Finance: FASB and the Mark-to-Market RulesMase: Economics and Financehttp://www.blogger.com/profile/16730994070959040962noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3210378500200629631.post-90122332714762178972009-04-13T14:47:00.000-07:002009-04-13T14:47:00.000-07:00I may misunderstand this rule and it's application...I may misunderstand this rule and it's application to the banks but if I don't misunderstand it this seems like a positive change. My understanding is that in a case where a bank makes a $500,000 loan against a $600,000 house and the borrower ceases to make payments against the loan the bank is forced to record the value of the loan as zero on their balance sheet since the payments are not being made and it is not likely that they can sell the note on a secondary market. Where the rule falls short is that it ignores the value of the collateral in the case of a loan secured by real property. While the value of the asset (right to foreclose) held by the bank will not be the full future value of the $500,000 loan payments it is certainly not zero and the change in the rule to allow the bank to assign a value other than zero is clearly logical. Do I understand this rule correctly?Anonymoushttps://www.blogger.com/profile/02885346508928303732noreply@blogger.com