BoA OWNED by person

[shmike]

Originally Posted by Papa_Complex

As I recall they get the insured value, minus whatever the property might be valued at, which leaves them with a property that will likely only appreciate in value.

Of course it will.

Real Estate always goes up in value.

[Papa_Complex]

Originally Posted by shmike

Of course it will.

Real Estate always goes up in value.

It does after it has bottomed-out and you got it at fire sale rates.

[shmike]

Originally Posted by Papa_Complex

It does after it has bottomed-out and you got it at fire sale rates.

That's true.

It is highly likely that the properties that they take possession of on that day will turn appreciate.

[Papa_Complex]

Originally Posted by shmike

That's true.

It is highly likely that the properties that they take possession of on that day will turn appreciate.

It certainly worked for the people who did that very thing, during and after The Great Depression.

[101lifts2]

Originally Posted by goof2

The banks did securitize and sell off some of the mortgages but they still hold a ton of them too.....

Banks did not write subprime loans knowing they would keep the loans, but rather conventional 15/30yr loans (as BofA did). As long as investors bought up the securities, everything was fine and dandy. But...after the burst, many lenders were stuck with these subprime gems and now were in deep shit when the default rate went through the roof.

....Working off your theory it shouldn't have mattered because Countrywide wouldn't have had any exposure to the losses. Instead it was a money pit that BoA had to deal with.

It is not a theory, it is truth. Many people just don't understand how threaded greed can be.

[101lifts2]

Originally Posted by derf

you just described me. my loan guy sold me on the adjustable rate, even though I was pre approved for almost 50k more than I paid. His argument was that it was cheaper for me on a monthly basis especially since most likely I would sell the house withing 5 years and make a profit. At the time it sounded right because it was at the time a rarity for people to loose money on a property. Since then my mortgage has been sold 5 times, and I cant get a conventional loan because the house is worth half what it was when I bought it the month before the housing market went kaput.

Did you put money down on this? It was cheaper for you, but more profitable for the loan company when they sold the loan off. It's like directing you to buy a certain car model saying "this is better for you" when in reality it was better for the dealer's bottom line. It is predatory lending....borderline fraud IMO.

[101lifts2]

Originally Posted by shmike

How was he abused?

It sucks that Derf got caught up in the market crash but he could have gotten a fixed mortgage. He wasn't forced into an ARM.

He also could have rented. Nobody forced him to buy when he did.

Getting caught up in the whole "make the lowest monthly payment possible, home values will ALWAYS go up" logic that was pervasive a few years ago is a shame but it's not like the bank(s) signed the contract to purchase the home.

You're missing the point. Lenders KNEW many couldn't repay loans after the fixed period BECAUSE they knew they were going to sell off the loans to investors. Then on top of it, the Standard and Poors, Finch etc. rating agencies were in the back pockets of these banks, so naturally the investment grade of these derivatives were always AAA.

Of course no one is going to put a gun to your head to make you sign the dotted line, but that wasn't the problem. The issue is that now he cannot refinance to a fixed rate because the value is 50% of what it was only a few years later.

These people defrauded investors IMO and many should be in prision.

[shmike]

Originally Posted by 101lifts2

You're missing the point. Lenders KNEW many couldn't repay loans after the fixed period BECAUSE they knew they were going to sell off the loans to investors. Then on top of it, the Standard and Poors, Finch etc. rating agencies were in the back pockets of these banks, so naturally the investment grade of these derivatives were always AAA.

Of course no one is going to put a gun to your head to make you sign the dotted line, but that wasn't the problem. The issue is that now he cannot refinance to a fixed rate because the value is 50% of what it was only a few years later.

These people defrauded investors IMO and many should be in prision.

You've added some decent information to this thread.

The above is not an example of it.

[Homeslice]

Originally Posted by shmike

You've added some decent information to this thread.

The above is not an example of it.

Just curious, why not?

Take the rating agencies for instance, who here thinks they were correct in calling those assets AAA?

[shmike]

Originally Posted by Homeslice

Just curious, why not?

Take the rating agencies for instance, who here thinks they were correct in calling those assets AAA?

Because he mentions a variety of different issues that are not necessarily correlated.