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Old 02-19-2018, 06:37 AM
Status: "delete" (set 21 days ago)
 
3,189 posts, read 1,274,360 times
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Can anyone say moral hazard? They are selling them to soon to be defunct pension funds.

But, like I said. Theft. For example the $200K a year pension being pulled by former community college psychology professor (easiest subject) who is now a Congress woman, options genius that makes money off 5% probabilities on the regular.

Anyway, here is how it works on an individual mortgage:

Lets assume a borrow has a $200,000 mortgage outstanding but isn't making payments. Goldman then comes along and buys that mortgage for $100,000 from Fannie Mae. Goldman then goes to the borrower and offers to reduce his mortgage balance to $150,000 if, in return, he'll agree to start making payments again. That $50,000 debt reduction then gets applied to Goldman's $1.8 billion settlement obligation. And the coup de gras, once the loan is performing again, Goldman can sell it for $150,000, thus pocketing a $50,000 cash profit plus settling $50,000 of their obligation to various government entities.
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Old 02-19-2018, 04:36 PM
 
Location: Cebu, Philippines
2,168 posts, read 797,279 times
Reputation: 4348
Quote:
Originally Posted by GeoffD View Post

A bank doesn't hold a gun to your head and insist you buy a car you can't afford, or max out your credit cards, or take out a mortgage on a home at the top of the real estate market when you have shaky employment.
The whole point here is they don't need to -- they know you will anyway. The history of banking is to observe personal behavior, and then find a way to profit from it. McDonalds doesn't put a gun to your head and insist you pay $50 a pound for onions that have been breaded and deep fried. They just position themselves to gain from the inclination for people to do it anyway.
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Old 02-19-2018, 04:47 PM
 
3,538 posts, read 1,988,790 times
Reputation: 6128
Quote:
Originally Posted by Jobster View Post
Yeah, I was lazy yesterday, but it doesn't matter what the articles say. The fraud will be perpetuated. It's almost time, so I have no problem because the banks will validate me with their behavior.

I didn't look hard enough to find examples of them selling, but they will. I mean, banks aren't stupid. The consumer is squeezed. That's exactly what I would do. Let the market crash, buy up houses for pennies, rent them out.

Easiest way to make money. Over 9 million households pay 50% of their income towards mortgage and rent. This is EASY money for banks.

So like I said, it doesn't matter what the articles say. I'll get validated by their actions. It's almost time.
someday your nostradamus' like predictions will come true... Until then the conjecture is lazy, inaccurate, and un-substantiated.
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Old 02-19-2018, 05:35 PM
Status: "delete" (set 21 days ago)
 
3,189 posts, read 1,274,360 times
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Originally Posted by SWFL_Native View Post
someday your nostradamus' like predictions will come true... Until then the conjecture is lazy, inaccurate, and un-substantiated.
I agree and I hope so.
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Old 02-19-2018, 05:39 PM
 
17,621 posts, read 12,203,533 times
Reputation: 12858
Quote:
Originally Posted by Jobster View Post

Can anyone say moral hazard? They are selling them to soon to be defunct pension funds.

But, like I said. Theft. For example the $200K a year pension being pulled by former community college psychology professor (easiest subject) who is now a Congress woman, options genius that makes money off 5% probabilities on the regular.

Anyway, here is how it works on an individual mortgage:

Lets assume a borrow has a $200,000 mortgage outstanding but isn't making payments. Goldman then comes along and buys that mortgage for $100,000 from Fannie Mae. Goldman then goes to the borrower and offers to reduce his mortgage balance to $150,000 if, in return, he'll agree to start making payments again. That $50,000 debt reduction then gets applied to Goldman's $1.8 billion settlement obligation. And the coup de gras, once the loan is performing again, Goldman can sell it for $150,000, thus pocketing a $50,000 cash profit plus settling $50,000 of their obligation to various government entities.

You are fabricating the math of these deals which is nothing new but nevertheless wouldn’t stop you from posting as though you know what you are talking about. There’s zero moral hazard in buying a non performing loan, modifying it and then selling it. That’s a win for the consumer and if you can do it profitably a win for Goldman
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Old 02-20-2018, 03:47 PM
 
6,997 posts, read 6,632,415 times
Reputation: 5274
Quote:
Originally Posted by Jobster View Post

Can anyone say moral hazard? They are selling them to soon to be defunct pension funds.

But, like I said. Theft. For example the $200K a year pension being pulled by former community college psychology professor (easiest subject) who is now a Congress woman, options genius that makes money off 5% probabilities on the regular.

Anyway, here is how it works on an individual mortgage:

Lets assume a borrow has a $200,000 mortgage outstanding but isn't making payments. Goldman then comes along and buys that mortgage for $100,000 from Fannie Mae. Goldman then goes to the borrower and offers to reduce his mortgage balance to $150,000 if, in return, he'll agree to start making payments again. That $50,000 debt reduction then gets applied to Goldman's $1.8 billion settlement obligation. And the coup de gras, once the loan is performing again, Goldman can sell it for $150,000, thus pocketing a $50,000 cash profit plus settling $50,000 of their obligation to various government entities.
It was written up a while back. The regulators and the banks are intertwined so the sanctions don't have any real teeth. Moral hazard would be if they expected to experience losses on these purchases and the government would come in to cover for them. This is a case where government agencies intentionally act like dumb money in order to push profits onto private enterprise where they may have ties. Another term for it is the revolving door, public-private 'partnership', or government-industrial complex.

It does smell when the same agency asks for bailout later the same year. They can write down these assets along with others.

Last edited by lchoro; 02-20-2018 at 03:57 PM..
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