January 26, 2011
I have discussed your proposed language with a number of lawyers and none of us can firmly agree on what the additional language the SEC added about calculation of value means. What is not clear about just excluding the value of the principal residence? That is what all of us have put in the definition in PPM documents, in italics, while waiting for the SEC to act on the Dodd-Frank amendments. We are speaking of net worth, excluding the value of the principal residence. If you owe more than it is worth, you have less net worth and if you owe less than it is worth, you have to exclude that equity anyway. When you need two paragraphs to explain why you are saying what you are saying, you are not saying what you intended to say very clearly.