Question-and-Answer Session
Operator
(Operator Instructions)
We will take our first question from Jon Armstrom with RBC Capital Markets, please go ahead.
Jon Armstrom - RBC Capital Markets
Can you talk a little bit about the new bankruptcies that came in and just at this point in time how you expect to resolve them whether it is a sale or you want them to go into REO?
Anthony Nocella
Well, there were two pre-announced Chapter 11 bankruptcies, the ones we had announced back in the November call. It is in effect at December 31 which in itself was foreclosure, so it went into REO. It is at market-to-market value relative to what we believe is a sale to a third party.
The second one is a builder that is located in Georgia and South Carolina. The bundle line collateral is substantial, but that also is a Chapter 11. That one may come out of sort of a pre-packaged bankruptcy. And that is how we based what we have in our listing.
Jon Armstrom - RBC Capital Markets
In terms of the deep dive that you did on your bill to book, what changes in 08 in terms of how you monitor the health of the builders, has anything changed at all or do you feel like you still need to be this aggressive or do you think you have captured everything?
Anthony Nocella
I think that our goals and objectives frankly, they have always been the same. We have looked at the underlying collateral, the difference I think historically, it did not have substantial declines in the underlying market value of collateral. We have consistently looked at collateral. At this point, we are looking at our entire builder finance book, the underlying credits on a weekly basis. We have established sort of a more intense risk management function with actually a loan sub committee which has the basic purpose of being able to monitor each one of the credits against the underlying collaterals. Every single loan we have at the present time is in that committee structure which is on top of the overall credit structure of the bank.
Jon Armstrom - RBC Capital Markets
Russell, I guess the question is, a year ago, you de-leveraged the bid if you will, maybe that is not the right term, but you sold some of your place holders and I guess I am curious with where mortgage rates are at this point in time, is that something that is on the table? I know you said it was going to be lower, but would you look at doing that at this point? Do you feel like you have some gains that you know you could possibly take?
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