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Old 10-03-2011, 07:46 PM
 
23,592 posts, read 12,446,982 times
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The treasury was going to buy the bad mortgages but didnt. The banks got bailed out. Who got the houses?
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Old 10-03-2011, 10:42 PM
 
Location: Barrington
61,200 posts, read 41,999,482 times
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Most of the banks repaid their bail out loans plus interest which is more than what most of those headed for foreclosure did.
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Old 10-03-2011, 11:25 PM
 
Location: Meggett, SC
10,955 posts, read 10,194,292 times
Reputation: 6154
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.
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Old 10-03-2011, 11:53 PM
 
Location: The bustling, world-renowned downtown of Pataskala, OH
188 posts, read 185,538 times
Reputation: 124
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.
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Old 10-04-2011, 01:18 PM
 
Location: Albuquerque
5,548 posts, read 15,161,465 times
Reputation: 2740
Quote:
Originally Posted by middle-aged mom
Most of the banks repaid their bail out loans plus interest which
is more than what most of those headed for foreclosure did.
This is a fairy tale.

The banks were able to borrow money at zero percent in unlimited quantites
and buy T-Bills ( which were yielding comfortably over 3% at the time ).

If everyone headed for foreclosure were offered the same deal, they would
cease to be heading for foreclosure.

Who paid for the banks to be able to "pay back their TARP loans?
Ask any senior citizen - trying to live off of their savings. They know.
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Old 10-04-2011, 01:39 PM
 
Location: Union County
5,999 posts, read 9,215,865 times
Reputation: 5372
Quote:
Originally Posted by middle-aged mom View Post
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.
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