Posted on 04/20/2010 11:50:10 AM PDT by 198ml
That’s a financial question.
BTW you are not liable for the balance through 2012 AND you were never liable for the balance in a bankruptcy.
Second mortgages are routinely wiped out in bankruptcy.
A credit score is a measure of how likely you are to keep your financial commitments.
Well stated.
DEFAULT swaps were valued based on ASSUMING they defaulted.
What were their bankrupcy values?
The banks were forced to make the loans so they figured out how to sell off the mortgages asap. THEN they figured out how to inflate the loans and still make money.
DEFAULT was always part of the equation.
That's something totally different than advocated here, which is strategic default.
Assessment of risk of default is always part of the equation of lending.
We all assess risk every day. If I step into the crosswalk without looking both ways I run the risk of getting run over.
I don't condone the actions of the speeder by looking both ways, and I don't relieve him of the consequences of his actions.
“A credit score is a measure of how likely you are to keep your financial commitments.”
BBZZZTTT wrong answer. Lets say you have a million dollars cash but have not borrowed any money in the last 10 years. You will have a low credit score indicating you are a poor risk.
It is a measure of how profitable you are to the lending industry.
The banks were using second mortgages as the “skin in the game” downpayment.
here the home owner AND the bank were investors in the future value of the property.
The banks further protected themselves by selling the notes based on their assumed defaulted value.
You are setting up an erronious analogy.
No analogy is needed here. You pay, you keep. no pay, no keep.
What part of the English language is difficult for you? ;-> The mathematics are a very tidy rationalization for demanding huge profits at the outset, while maintaining huge leverage in the principal vs. the mortgagor. It is not just tidy, it is brilliant... as rationalizations go.
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