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  • codehead321 codehead321 Aug 20, 2007 12:35 PM Flag

    $37.50 within 12 months

    I believe that even when real estate fell in the late 1990's, prime mortgages were defaulted at a rate less than 10%. If you only look at the prime mortgages on CSE's books of 2.6 billion, we can guestimate a worst case scenario. Assume that 10% defaults and that the value of the underlying asset will only payoff 80% of the mortgage.

    2.6b x 10% x 20% = 52m

    In other words, CSE could lose 52,000,000 if the situation continues to get worse. I do not believe that is material considering that they are actually in the commercial mortgage business. If the economies of the world go into a recession, then all bets are off. IMHO, CSE is a good bet.