Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It's a bit more complicated than that. The banks split up these mortgages and packaged them and consequently selling them as investments. Thus, when the house forecloses, it's actually hard to tell exactly who owns the house but the servicing company is the one getting the funds for that mortgage and dispersing that to the investors. At the end of the day, the banks that were servicing these mortgages and had sold them as investments got bailout money from the Fed to write off those bad investments. When the houses foreclose, the bank then has that as an asset as well. Clear as mud, right?
To sum it up, the banks sold the mortgages as investments. The house foreclosed so the investment went sour. The Fed gave money for the bad investment, allowing the bank to keep both the house and write off that bad investment.
Location: The bustling, world-renowned downtown of Pataskala, OH
188 posts, read 197,835 times
Reputation: 129
Put it this way, I have a degree in economics(yeah I don't care either) and don't have a clue in hell. Couldn't put it any better than clear as mud. Seriously, when I think about economics in this country, it's so damn mind-boggling confusing I wish I didn't know anything.
Most of the banks repaid their bail out loans plus interest which is more than what most of those headed for foreclosure did.
So you owe a debt to financial company XYZ. You get a new zero interest rate credit card in the mail from the same company, you use it to take a cash advance, and then send that money back with your original statement. I guess you can say you "repaid" the debt. But seriously, did you?
The simple fact remains that these companies didn't earn even a small percentage of the total debt they owed - earnings are public record for these publicly traded companies so it's no secret. They couldn't have paid the money back without shifting the debt around. Basic math.
If I was going into foreclosure, I wouldn't have that luxury.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
