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mortgage insurance company" and "was purchased by an
unrelated lender shortly after the loan was funded".
According to petitioners, the unrelated mortgage insurers
and the lenders who acquired the loans in the secondary
market each "had the incentive to ascertain that the value
of the properties was at least equal to the debt" and the
fact that they undertook to participate in the transactions
is "evidence that the fair market value of the properties
was at least equal to the amount of the debt at the time
it was incurred." Petitioners argue that "the unrelated
lenders and insurers did due diligence" and, in fact "would
have exercised special caution with respect to such loans"
because of the unusual nature of the loans. They further
argue that the facts show "that there was no attempt by
EPIC to conceal the facts."
Petitioners acknowledge that the partnerships
purchased the properties with substantial discounts and
that the partnerships did not pay the contract price for
any of the properties purchased. As stated in their
posttrial brief: "common sense suggests that a large
and astute investor [such as EPIC] would demand price
concessions." Thus, petitioners acknowledge that the
prices paid by each partnership reflected the discounts
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