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Clintons use creative financing for home - R. Hershey Jr.; Fresno Bee 12 Sept.

The package that the cashed-strapped first family will use to buy a $1,700,000 house in Chappaqua, N.Y. is a clever & unusual piece of financial engineering designed to avoid various tax & other pitfalls ...

The deal calls for Terry McAuliffe ... to personally supply $1,350,000 in collateral that the lender, Bankers Trust Private Banking, could seize should the Clintons fail to make payments on a house costing 3 times what a presidential salary could afford.

Some private analysis said they were struck by what a good deal it appeared to be for the Clintons - even though the bank itself, with whom 3 Clinton administration aides/friends have had ties, seemed to have not been particularly generous.

... Bankers Trust ... acquired in June by Deutsche Bank, would not want to explain to examiners an ostensively uneconomic loan to a couple with a negative net worth because of $5,500,000 in legal debts...

Nor would it be content to use only the house itself for collateral because of the public black eye it would certainly suffer in the ... it should ever have to foreclose.

... low interest rate, which was calculated at 6.52% ...

... McAuliffe's $1,350,000 ... would consist of cash ...

The Clintons are to supply $350,000 for the down payment ... that excuses the couple from paying ... hundreds of dollars a month in mortgage insurance ... The Clintons will be making their own monthly payments.

... Many major banks have special units ... that cater to the carriage trade...

... something of economic value ... is being conferred on the Clintons, tax specialists said they doubted this would result in taxable income unless it were to be taken to pay off the mortgage.

The contingent nature of the money's deployment also exempts it from government disclosure rules ...

"He's the president of the United States & someone is doing a million-dollar favor to him to help him with his personal needs ... That creates an appearance problem, a potential conflict problem , & it's a dangerous kind of act."



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