Curriculum Guide · Courses

Professors John Hagner and John Ratino

J.D. Course 384 (cross-listed) | 1 credit hours

The goal of this mini-course is (i) to introduce students to the structure, economics and key participants in financing transactions involving income-producing property in the U.S. capital markets, (ii) to identify and explain the factors which caused the economic turmoil in the capital markets from 2008 to 2011, and (iii) to review briefly the U.S. Government’s actions in seizing control of Fannie Mae and Freddie Mac and its efforts to stabilize and regulate the U.S. capital markets. This mini-course will discuss economic return, how it is determined, how it is shared by the participants, and how it drives fundamental legal structures and negotiations. It will also cover basic concepts of cash flow, leverage, and tax sheltering of income. It will introduce the economics of asset-based financing, including loan-to-value ratios, interest rates, amortization and residual value and how they are incorporated in the business and legal structure. It will cover leasing of personal property as a financing technique and the legal structure of securitized finance, in which loans are pooled and interests in the pools are sold as securities. Emphasis will be given to structuring public and private funding of real estate. The mini-course will be a survey of complex financing techniques and will not emphasize math, but rather practical understandings and concepts involving the business and legal framework for financing income-producing property.

Students may not receive credit for both this course and Finance of Real and Personal Property.

This course meets on seven Mondays in the first half of the Spring 2014 semester on the following days: 1/13, 1/27, 2/3, 2/10, 2/20 (Thursday), 2/24, and 3/3.