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.
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.