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Owners lose leverage, find unyielding banks

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Lost leverage is the downfall of owners, Lois Weiss wrote in the Post today. “Our steroids were leverage and the buyers were way over-financing,” one unnamed broker said. “If their bank was handing over 90 to 100 percent of the money for the deal, they weren’t sensitive to what they were paying. But if they financed the deal short-term, it’s now sayonara.” Many of the financing deals that went through were based on bank financing that’s no longer feasible in the credit crisis, Weiss explained. For the future, this means banks could be taking a harder line with borrowers and pursuing litigation more regularly.