irstaxblognow.com

Definition of Transfer-of-Title Nonrecourse Securities Loans. A nonrecourse, transfer-of-title securities-based loan (ToT) method exactly what it says: You, the title holder (owner) of your stocks or other securities are required to transfer ownership of your securities to a third party before you receive your loan proceeds. The loan is “nonrecourse” so that you may, in theory, simply walk away from your loan repayment obligations and owe nothing more if you default. Sounds excellent no doubt. Maybe also excellent. And it is: A nonrecourse, transfer-of-title securities loan structure requires that the securities’ title be transferred to the lender in advance since in virtually every condition they must sell some or all of the securities in order to obtain the cash needed to fund your loan. They do so since they have insufficient independent sources of funding of their own. Without selling your shares the minute they arrive, the could not stay in business.
Tags: | expats | law | social networking |

Be Sociable, Share!

•