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[101lifts2]

Originally Posted by shmike

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

They are correlated and well tied together.....they needed investors to KEEP INVESTING. And to do this, you needed to keep the investment rating at an AAA.

They were only lowered like sometime in 2009...well after the bubble....wonder why.

[Papa_Complex]

Originally Posted by 101lifts2

They are correlated and well tied together.....they needed investors to KEEP INVESTING. And to do this, you needed to keep the investment rating at an AAA.

They were only lowered like sometime in 2009...well after the bubble....wonder why.

Like any good Ponzie or Pyramid Scheme when you stop bringing in new marks, it collapses.

[goof2]

Originally Posted by 101lifts2

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.




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

Keep in mind, I'm not arguing that banks weren't greedy and didn't do some shady things. I agree, they did.

The only two concepts I have taken issue with are absolving borrowers from any responsibility when they were driven by the same greed that drove the banks, and the argument that banks are actually making money on this fiasco.

However it was handled, many banks ended up with a lot of crappy loans that have gone in to foreclosure. Those lost them a lot of money.

[goof2]

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.

Banks aren't in the business of holding on to homes and making money on the appreciation. They don't have the infrastructure to deal with the inventory and they don't want to pay the taxes and bills that go with home ownership on the scale with which they are now dealing. That also assumes the insurance made them whole. In many cases the decline in value has been greater than their insurance coverage.

Even ignoring all that, no matter how likely it may be, appreciation has not yet begun. Overall home values in America have instead continued to go the other direction.

[Homeslice]

BTW, as to the video.........That lawyer has probably been in practice only a couple years, and is only doing this to get publicity.

[Captain Morgan]

Originally Posted by 101lifts2

Many of these banks did NOT hold the mortgages for subprime loans. Do you think banks were stupid? They kept the 30yr/15yr loans with 5% down/PMI and sold off the subprime loans. The ONLY purpose of the subprime loans were to sell to investors to make a buck when they bundled them and sold them off. Since these investments were AAA rated, many investors from other countries bought them up. The investors lost, not the banks, yet the banks got the bailout.

Once in a foreclosure, the bank will sell the property for it's value, then the PMI pays 25% of the market value. If the owner put 5% down and say paid 3 years in payments, the bank is not taking a loss. In many cases, the bank makes money. This is why they force you to pay PMI unless you put 20% or more down.

We can also go into how banks bet against CDOs paying out the full loan terms.

Avatard is right (not very tactful, but right). These banks and large corporations are using the government to deregulate shit/mandate legislation or tax so a small few can become very weathly at the expense of the taxpaper. It's going to lead to this country's demise.

I can't really say it much better than goof has said it. Keep in mind, the bank doesn't always sell the property for "it's value" at foreclosure. When they're holding as many properties as they are right now, many of them are taking whatever they can get just to get the properties out of their hands. And what about the people who only made a years worth of payments, often putting zero down? We can play with the numbers all day long, but I don't see anyone holding the good end of the stick right now. The ONLY people who are possibly in good shape are the ones that had a bunch of cash sitting on the sidelines and were able to buy up properties at foreclosure rates, then rent the properties out while waiting for the market to come back up. Yes, those are generally wealthy people, but it's not the banks. The banks are not in the landlord business and don't want to be in that business.

[101lifts2]

Originally Posted by Captain Morgan

I can't really say it much better than goof has said it. Keep in mind, the bank doesn't always sell the property for "it's value" at foreclosure. When they're holding as many properties as they are right now, many of them are taking whatever they can get just to get the properties out of their hands. And what about the people who only made a years worth of payments, often putting zero down? We can play with the numbers all day long, but I don't see anyone holding the good end of the stick right now. The ONLY people who are possibly in good shape are the ones that had a bunch of cash sitting on the sidelines and were able to buy up properties at foreclosure rates, then rent the properties out while waiting for the market to come back up. Yes, those are generally wealthy people, but it's not the banks. The banks are not in the landlord business and don't want to be in that business.

Investors for the most part own the subprime loans and therefore own the foreclosed homes. Banks are just servicers in this regard. The conventional less risky loans owned by the banks have also failed due to the economy, but those loans had money put down, insurance and most likely some years or principal and interest.

You need to replace "banks" with "investors" and then you'll have it right.

[Particle Man]

Originally Posted by 101lifts2

You need to replace "banks" with "investors" and then you'll have it right.

I know quite a few people who didn't know that mortgages get bought and sold all the time.

I thought that was just a given.

[goof2]

Originally Posted by 101lifts2

Investors for the most part own the subprime loans and therefore own the foreclosed homes. Banks are just servicers in this regard. The conventional less risky loans owned by the banks have also failed due to the economy, but those loans had money put down, insurance and most likely some years or principal and interest.

You need to replace "banks" with "investors" and then you'll have it right.

It is actually both rather than one or the other. Banks still held quite a few of the subprime loans.

[Papa_Complex]

Originally Posted by goof2

Banks aren't in the business of holding on to homes and making money on the appreciation. They don't have the infrastructure to deal with the inventory and they don't want to pay the taxes and bills that go with home ownership on the scale with which they are now dealing. That also assumes the insurance made them whole. In many cases the decline in value has been greater than their insurance coverage.

Even ignoring all that, no matter how likely it may be, appreciation has not yet begun. Overall home values in America have instead continued to go the other direction.

Perhaps not but they can profit in the sale, of that property, and have received payments towards it. They make money, on virtually every foreclosure. Believe me; both my parents were in banking for their whole lives