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Thread: BofA halts foreclosures in 50 states

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by Erod View Post
    Good point on the bailouts. Not sure just how much the banks got, but if they were made whole on the majority of their bad loans, then I guess, there could be some residual profit from the second sale.
    I doubt that there were any true 'bad' loans since under the fractional reserve bank system the individual banks can create money out of thin air by taking 90% of a deposit and create ten times the amount in new money. For example, a bank receives a 1 million dollar deposit. Out of that 1 million, they can take 900k of it to create an additional 9 million dollars, so did the banks actually lose money?

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by Erod View Post
    Good point on the bailouts. Not sure just how much the banks got, but if they were made whole on the majority of their bad loans, then I guess, there could be some residual profit from the second sale.
    so when a bank sells a loan.........it's not sold? roflmao. silly, silly, silly.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by The_Patriot View Post
    I doubt that there were any true 'bad' loans since under the fractional reserve bank system the individual banks can create money out of thin air by taking 90% of a deposit and create ten times the amount in new money. For example, a bank receives a 1 million dollar deposit. Out of that 1 million, they can take 900k of it to create an additional 9 million dollars, so did the banks actually lose money?
    It truly is mind-boggling.

    And to think, counterfeiting is illegal for the rest of us.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    so when a bank sells a loan.........it's not sold? roflmao. silly, silly, silly.
    When the banks sell the loan, it is treated like a regular deposit. They can take 90% of the deposit to create 10 times the amount in new cash to be lent out. The remaining 10% has to stay within the bank on the cash balance sheet as a reserve to cover deposits of the people that use the bank for savings and checking accounts.
    Last edited by The_Patriot; 10-08-10 at 06:04 PM.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by Erod View Post
    It truly is mind-boggling.

    And to think, counterfeiting is illegal for the rest of us.
    hey dude....that's just nuts.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    not really. sooner or later they will have to pay the piper....
    Well, no... most haven't paid the piper for months, and are going to sit payment-free until the piper kicks them out.

    Ultimately it will be the taxpayers who pay the piper, via government guarantees.

    See Mae, Fannie and Mac, Freddie.
    Quote Originally Posted by liblady View Post
    in the meantime, having no vacant houses in your neighborhood keeps crime down, and keeps your property value from further declining.
    Again, short term concerns. The correction is coming, most of these houses will end up as foreclosures sooner or later. Better to get it done sooner rather than later so that we can get on with the recovery.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by The_Patriot View Post
    When the banks sell the loan, it is treated like a regular deposit. They can take 90% of the deposit to create 10 times the amount in new cash to be lent out. The remaining 10% has to stay within the bank on the cash balance sheet as a reserve.
    you just said they could sell the loan twice. they can't. period. when it's sold, yes, it's cash. but they don't RETAIN the loan, nor do they just keep cash for cash's sake. the loans that banks are foreclosing on are portfolio loans, silly, not the loans they SOLD.


    i don't think you have a clue how banks operate.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    hey dude....that's just nuts.
    Apparently, you didn't get the joke. Oh well.

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    Re: BofA halts foreclosures in 50 states

    i guess not...but i'm glad you clarified.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    you just said they could sell the loan twice. they can't. period. when it's sold, yes, it's cash. but they don't RETAIN the loan, nor do they just keep cash for cash's sake. the loans that banks are foreclosing on are portfolio loans, silly, not the loans they SOLD.


    i don't think you have a clue how banks operate.
    No, I said that they sold the loan as an investment once. They take the money from the sale and put it down as a deposit. From that deposit, the regular fractional reserve banking rules take effect. 90% of the deposit is multiplied by 10 to generate ten times the amount of money that the bank can use to lend out. The remaining 10% is held as a reserve for the savings and checking accounts inside of the bank. For example, BofA sells a 500K home loan as an investment for say 500k at 5% APR. Out of that 500k, the bank has to put on the reserve/cash balance sheet 50k. The remaining 450k is multiplied by 10 to get 4.5 million in new money to be lent out as new loans. On top of the ability to create new money, they are going to be making 5% APR on the investment of the original loan. Here's a handy link that explains how it really works.
    Last edited by The_Patriot; 10-08-10 at 06:24 PM.

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