I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

My view is that the risk of falling asset values is a realistic risk, but not a catastrophic risk. 

This saves the party from a foreclosure, which would be catastrophic to their credit, thus making a bad situation, worse. 

Maybe we can argue about the consequences of these action on real estate world, and the appropriate response without catastrophizing the end of the republic? 

Obviously there is no crystal ball which can predict how the job market reacts in the event of an unforeseen catastrophic event like the GFC.

The co-pays and out-of-pocket costs are thousands per year, but without insurance the costs would be catastrophic. 

If I see a 50% reduction in rents it’s because we’ve reached peak catastrophe...

Short of something catastrophic, there will be enough to pay off the loan, but they may suffer a significant loss of their money.

Foldvary points out that the cycle does not always function on a precise 18 year schedule, but - baring catastrophic events like a world war - for the most part the cycle should be right around 18 years.

You have 26% chance per year of having a 100 year catastrophic event.