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Strategies & Market Trends : Asia Forum

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To: tekgk who wrote (426)	1/4/1998 12:17:00 PM
From: tekgk	Read Replies (1) of 9980

Does anyone more knowledgeable than I on Japanese law have a comment on the following? kitcomm.com "Banks in Japan are only now being forced to acknowledge that mortgage payments are not current. I understand that Japanese law allows 2 years of non-payment before the official acknowledgement is made. Most are over that point now and the government just winked at it. Now default by borrowers will be officially declared." "The collateral associated with the defaulted loans must be liquidated. In the case of Japan that amounts to many, many trillions of yen worth of real estate that must be sold to the highest bidder. The new owners will be bidding into a falling market as thousands of properties must be liquidated simultaneously. All properties, even those not being sold, will be marked to market. Thus even those owners who might now be current with mortgage payments could decide to walk away from properties which are falling in value. They are not going to pay for a dead horse. That is the way a downward deflationary spiral works. "

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