Business is Personal (Finance)

Some of the examples of woe in the article:

A self-made man, he had sold a business and put much of the proceeds in a charitable remainder unitrust that paid him $150,000 a year. He took paper losses in his stock portfolio against that income, however, which lowered his taxable income. The cash flow stayed intact but the income he showed was much lower.

So you put most of your assets into a trust. And if you default on your mortgage, I can't touch your assets. Hmmm ... ok, sure, let me write that check to you right now.

The problem was that the client wanted to buy a second home. And because the client would not, could not, swear that he would occupy the home at least 75% of the time, lenders weren't interested.

So you want to borrow -- oh let's say $2M -- to purchase an investment home. Your monthly expenses will be about $20K/mo including tax and maintenance. You will then rent out for $8K/mo. Uh huh ... and when were you planning to walk away?

Take the doctor client of Bruno's with a home on 19 expensive acres of Connecticut countryside. He had more land than he needed and some time ago toyed with the idea of subdividing and selling it off...His bank wouldn't count the sub-dividable land, worth $8 million, as collateral because it was now a separate parcel...His lenders limited him to a loan of $1.3 million.

Ah yes, the amateur land developers. They had a pretty good record of repaying their loans. I hate to say it but this is a rather obvious consequence of his action. His house now sits on a smaller plot of land. Since all the other parcels are considered separate, he needs to get refinancing for each plot. What? Banks won't refinance empty land? But but but ... they're not making any more land!!!

Not to turn the screws too much on the examples in this story but It does seem like writers in business/investing/financial media often don't know what they're writing about. I can count article after article where the writer did not ask basic questions. But I guess they need to appeal to the masses with emotional stories instead of accurate stories.