Kowani wrote:Nobel Hobos 2 wrote:Except I doubt the banks are being fucked very hard. They lose cash-flow from mortgages, yes, but aren't they going to get all they're owed eventually?
And are they allowed to still keep adding interest to the debts? If so, they'll actually be better off by the time the mortgage is paid down.
If a one person owes the bank $1000, that’s their problem.
If 60 million people owe the bank $1000, that’s the bank’s problem.
Don't think that a retail bank collapsing means the mortgage holders get to keep "their" house with no more payment. Their mortgage is an asset of the bank, and will be sold on to a secured creditor (possibly the bigger bank who loaned the retail bank money), either before collapse or as part of bankruptcy proceedings.
Banks will 'repossess' some houses too. A few mortgage holders will die. Some will move, so they have no use for the house even if it requires no payments. Some may be convicted of crimes, and so on. Selling those houses should help a retail bank stay afloat.