Ask more questions before calling loans profitable

2012-11-06T00:00:00Z Ask more questions before calling loans profitable nwitimes.com
November 06, 2012 12:00 am

Porter County loans to Lake County schools and municipalities are, we're told, “shaping up to be a profitable investment move." Really?

Just because a school or municipality has not defaulted on a loan for 20 years prior and works with a financial specialist does not make it a good loan. It might default or might not follow recommendations of its financial specialist.

Is investing $63.3 million of its $173 million assets in such a small number of loans ever prudent?

Reported Lake County financial problems raise reasonable concerns. Relying on state minimum requirements is not a substitute for sound investment underwriting.

I do not know whether these are safe investments. I do know, however, that Porter County residents are owed a much better explanation.

The Times should ask more questions before pronouncing the loans as a profitable investment move.

- Richard C. Wathen, CPA, Valparaiso

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