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Originally Posted by SmokeyTheBear
The bank is not giving you a loan of 300k on a house worth 200k. You also forgot the bank doesn't actually have 300k to lend , they are simply borrowing the 300k at a lower interest rate than you  |
You get way to detailed for most GFY'ers to follow, most banks flipped it to fanny mae, freddie mac who serviced the loans and took the debt. Regardless of the exact details, at the end of the day the bank is taking the loss if the house sold for less than purchase price minus money collected from the idiot bought it.
Quote:
Originally Posted by SmokeyTheBear
If the bank sells the house for 400k do you think they give the 30k back ? So if the house sells for the same or more then you lost 30k and the bank made money.
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That will rarely if ever happens. If there was equity in the house the person would have sold it on their own prior to losing it.
Quote:
Originally Posted by BlackCrayon
the big banks knew exactly what was going on and knew it was very risky but like all investors, when you make a bad investment, you take a loss, well not when you get government to bail you out. basically they have a golden ticket to invest as recklessly as they please because they won't be allowed to fail.
people are stupid! individual morons being allowed to determine if they can afford a mortgage or not is crazy! banks should be protecting their assets. not giving them out like candy "assuming" the buyer is responsible and knows what he's doing. the whole housing crisis was like a huge pump and dump stock scam, at least to my simple mind. of course people are going to lose their homes when their payments double due to the whole subprime scam which should of never been legal in the first place, a lot of people didn't even understand the concept.
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I agree and that is reason for ME to be pissed at the banks and the people running them thrown in jail. But is not an excuse for the idiot who bought more house then he could afford then lost it, to be pissed at the big bad bank and want to blame them (and everyone else) for their problems.
You'd think people would be smart enough to know what they could afford or not, but most can't. The banks fucked up and let the tax payers down. They let the idiot's make decisions, and like typical idiots, they get to make their own decisions, fail, and get mad at someone else. classic.