If I had an Apple that you want and I sold it to you but you didn’t eat the apple and it never got spoiled, I could sell the apple to someone else if you didn’t finish payment. You are just one step in a series of many many re-sales of the same house. The house is owned by the banks. They just change which bank is on the title after your temporary ownership. You see, you have this funny thing we all humans have…limited shelve life. Banks don’t have that. They can last for as long as many generations of people. So long as the financials work, they can stay afloat. Not you. You die, your kids die, their kids die. People tend to not stick around the same house forever. So every interchange between you and the bank, the bank always wins. You always lose to inflation. The bank always wins because a house always is worth what people are willing to pay for a house…it rides inflation.
The life of a mortgage is worth far more than the house. It’s in their best interest that you stay in the house for the entire 30 years of the mortgage and pay for it on time every time. Foreclosure is expensive.
Its only temporarily expensive. Let’s say there’s only one bank and one house. Then whenever the owners fuck up and they lose the house as expected, the same bank owns the house. Now just add an “s”. Whenever everyone fucks up their houses are owned by the same banks. The banks are not there to help you. They are there to extract your labor into a form that can be monetized. So having bank X or bank Y own the house doesn’t really matter… A bank will eventually own your house back. You work all your life but there’s no venue to actually keep a house under your control and ownership. Just taxes are enough. Fuck up in taxes and you lose the house.
I think I understand what you’re trying to say but you’re still missing the main point. You pay interest for the full 30 years of the mortgage the most profitable position for the bank is for you to pay that interest for the full 30 years of the mortgage. It’s not temporarily expensive for them to foreclose they lose out on 30 years of being able to rake in money while doing absolutely nothing.
Yes agreed. But they still ride inflation because they create it. You were supposed to pay 1,000,000 but stopped at 7000,000? They’ll sell it for 1,300,000 and someone will buy it. If not, someone will buy it at the loss. That one bank loses the 300,000, but another bank makes 1,000,000 because someone will buy it. Say your monthly was $350 and you stop paying. The bank then takes the home and pays a Realtor to sell it. A few months later they are making $450 a month. They just lost some time on it. If you pay it completely then another bank eventually owns the house when you sell one day.
You were supposed to pay 1,000,000 but stopped at 7000,000? They’ll sell it for 1,300,000 and someone will buy it.
Any profits from a foreclosed home go to the evicted homeowner. Banks do not make money on foreclosures. Banks do not want to foreclose on you, they want you to pay your bill.
Less profitable is not unprofitable. But yes interest is typically front-loaded and if you’re still deemed to a higher risk typically have to pay insurance on top of that. In this case though they’re hedging against the fact that you’re going to move not that you’re going to foreclose.
Banks do not make a profit on foreclosure. If the house sales for more than the bank is owed (including foreclosure fees), then any surplus is given to the original owner.
That’s not completely true, because it depends on the future value of your house. Plenty of banks got burned in the early 2000s when they gave out too many loans and then all of a sudden the houses weren’t worth what people owed on them.
Foreclosed houses very rarely sell for what they’re worth and it’s not uncommon for people who are foreclosed on the trash the house on the way out.
When my wife and I were recently looking for a house in the city we moved to recently one of the houses we looked at had had the air conditioner taken by the previous owners because it had been foreclosed on. I’m serious, the entire fucking condenser was taken.
Just pointing out that foreclosing on a house isn’t profitable for a bank.
not really. They got paid at least some of the mortgage, housing prices keep going up and damage is fixed by paying some poor asshole peanuts. Even if it isn’t profitable , I don’t really care, I’m not losing any sleep at night over the fucking assholes.
No part of anything that I’ve said should be construed as defending a bank. The fact that you keep going out of your way to call it that is why I’m telling you that I feel you need to calm down.
The only point I was trying to make is that foreclosure is neither in the best interest of the bank or the homeowner.
After 2007/2008 it became very clear to banks that they need to prepare for the case where people can’t make mortgage payments because the economy crashed, and house values have plummeted because nobody’s able to buy a house because the economy crashed.
the bank isn’t out of jack shit, they reposess your house.
Which they can re-sale at a higher value to the next fool. So it’s in their interest that you pay for a while, then sale or fail.
Congrats, you recreated the 2008 financial crisis!
If I had an Apple that you want and I sold it to you but you didn’t eat the apple and it never got spoiled, I could sell the apple to someone else if you didn’t finish payment. You are just one step in a series of many many re-sales of the same house. The house is owned by the banks. They just change which bank is on the title after your temporary ownership. You see, you have this funny thing we all humans have…limited shelve life. Banks don’t have that. They can last for as long as many generations of people. So long as the financials work, they can stay afloat. Not you. You die, your kids die, their kids die. People tend to not stick around the same house forever. So every interchange between you and the bank, the bank always wins. You always lose to inflation. The bank always wins because a house always is worth what people are willing to pay for a house…it rides inflation.
The life of a mortgage is worth far more than the house. It’s in their best interest that you stay in the house for the entire 30 years of the mortgage and pay for it on time every time. Foreclosure is expensive.
Its only temporarily expensive. Let’s say there’s only one bank and one house. Then whenever the owners fuck up and they lose the house as expected, the same bank owns the house. Now just add an “s”. Whenever everyone fucks up their houses are owned by the same banks. The banks are not there to help you. They are there to extract your labor into a form that can be monetized. So having bank X or bank Y own the house doesn’t really matter… A bank will eventually own your house back. You work all your life but there’s no venue to actually keep a house under your control and ownership. Just taxes are enough. Fuck up in taxes and you lose the house.
I think I understand what you’re trying to say but you’re still missing the main point. You pay interest for the full 30 years of the mortgage the most profitable position for the bank is for you to pay that interest for the full 30 years of the mortgage. It’s not temporarily expensive for them to foreclose they lose out on 30 years of being able to rake in money while doing absolutely nothing.
Yes agreed. But they still ride inflation because they create it. You were supposed to pay 1,000,000 but stopped at 7000,000? They’ll sell it for 1,300,000 and someone will buy it. If not, someone will buy it at the loss. That one bank loses the 300,000, but another bank makes 1,000,000 because someone will buy it. Say your monthly was $350 and you stop paying. The bank then takes the home and pays a Realtor to sell it. A few months later they are making $450 a month. They just lost some time on it. If you pay it completely then another bank eventually owns the house when you sell one day.
Any profits from a foreclosed home go to the evicted homeowner. Banks do not make money on foreclosures. Banks do not want to foreclose on you, they want you to pay your bill.
I get what you are saying, but I think you are vastly overestimating how much foreclosed houses sell for.
Interest is typically front loaded, yeah? The loan only becomes less profitable as time goes on with inflation growing and interest dwindling.
Less profitable is not unprofitable. But yes interest is typically front-loaded and if you’re still deemed to a higher risk typically have to pay insurance on top of that. In this case though they’re hedging against the fact that you’re going to move not that you’re going to foreclose.
Banks do not make a profit on foreclosure. If the house sales for more than the bank is owed (including foreclosure fees), then any surplus is given to the original owner.
*sells
This ignores the market manipulation they can do by just selling to “totally not related to out bank… blackrock or something”.
Are they not required to sell it on the market? So if a related company bids low, anyone else can just swoop in and take it.
That’s not completely true, because it depends on the future value of your house. Plenty of banks got burned in the early 2000s when they gave out too many loans and then all of a sudden the houses weren’t worth what people owed on them.
If there is ever an economic crisis that results in housing prices dropping, the banks get bailed out.
I’ll shed a single tear for those banks who reposessed those houses that are now worth an absolute fucking fortune when I get a house of my own.
I’m not crying for the banks, but that’s why they don’t just give out loans to anyone.
Foreclosed houses very rarely sell for what they’re worth and it’s not uncommon for people who are foreclosed on the trash the house on the way out.
When my wife and I were recently looking for a house in the city we moved to recently one of the houses we looked at had had the air conditioner taken by the previous owners because it had been foreclosed on. I’m serious, the entire fucking condenser was taken.
yeah but you’re not going to make me feel sympathy for JP Morgan Chase.
They should’ve cut back on their avocado toast if they wanted to run a successful bank
I wasn’t trying to make you feel sympathy for a bank. Just pointing out that foreclosing on a house isn’t profitable for a bank.
not really. They got paid at least some of the mortgage, housing prices keep going up and damage is fixed by paying some poor asshole peanuts. Even if it isn’t profitable , I don’t really care, I’m not losing any sleep at night over the fucking assholes.
Nobody was asking you to lose sleep. I kind of feel like you need to calm down.
why are you so hell bent on defending the banks? I feel you need to relax and not put in overtime.
No part of anything that I’ve said should be construed as defending a bank. The fact that you keep going out of your way to call it that is why I’m telling you that I feel you need to calm down.
The only point I was trying to make is that foreclosure is neither in the best interest of the bank or the homeowner.
After 2007/2008 it became very clear to banks that they need to prepare for the case where people can’t make mortgage payments because the economy crashed, and house values have plummeted because nobody’s able to buy a house because the economy crashed.