Mr. Welters, in response to questions from the Finance Committee, shared mortgage paperwork dated Dec. 6, 1999, exhibiting that he lent Justice and Mrs. Thomas your complete buy quantity at an annual rate of interest of seven.5 %. Whereas that charge was according to what might need been discovered within the market on the time, what made the association unusually favorable was that over the course of the five-year mortgage, Justice Thomas didn’t have pay down any of the principal.
As a substitute, he merely needed to make annual curiosity funds of $20,042. The principal quantity borrowed would come due in a balloon fee on the mortgage’s maturity date, in December 2004. Automobile loans like this one are very unusual, specialists stated, due to the chance to the lender: The worth of the collateral securing the mortgage — on this case, a motor coach — depreciates quickly, whereas the excellent principal stays fixed.
In a handwritten be aware to Mr. Welters on his Supreme Courtroom letterhead, dated the identical day the mortgage paperwork have been signed, Justice Thomas stated the mortgage settlement ought to precisely mirror their understanding, and promised to abide by it to the letter, in keeping with the Senate report.
However in 2004, when the principal got here due, Justice Thomas didn’t make good on his debt, in keeping with information obtained by the committee and cited of their report. As a substitute, Mr. Welters granted him a 10-year extension, with the identical interest-only phrases. This, even supposing the earlier 12 months Justice Thomas had collected $500,000 of a $1.5 million advance for his autobiography, in keeping with his monetary disclosures.
Then, in late 2008, Mr. Welters merely forgave the stability of the mortgage, in keeping with the committee’s report.