Does Anyone feel like Bailing

classicman · 10-05-2008, 11:02 AM

Lemme see if I can do this - It doesn't matter whether it is a defaulted loan or not. The way I understand it is that Bank 1 sells the mortgage to Bank 2 for an amount less than they issued it for, say .5% and, most times, Bank1 keep that for managing/processing it.

The real issue is that the banks cannot take into account the value of the house in 5/10/20 or 30 years as an asset. When they are being judged "creditworthy" under the mark to market system, they can only use the immediate house/mortgage value today. They cannot take into account appreciation of the property or the interest they will earn on the loan.

10-05-2008, 11:02 AM	#11
classicman barely disguised asshole, keeper of all that is holy. Join Date: Nov 2007 Posts: 23,401	Lemme see if I can do this - It doesn't matter whether it is a defaulted loan or not. The way I understand it is that Bank 1 sells the mortgage to Bank 2 for an amount less than they issued it for, say .5% and, most times, Bank1 keep that for managing/processing it. The real issue is that the banks cannot take into account the value of the house in 5/10/20 or 30 years as an asset. When they are being judged "creditworthy" under the mark to market system, they can only use the immediate house/mortgage value today. They cannot take into account appreciation of the property or the interest they will earn on the loan. __________________ "like strapping a pillow on a bull in a china shop" Bullitt

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