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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 The_Patriot View Post
    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.
    and then you said that they sell the loan after foreclosure. your post, not mine.

    and i'm sorry, but one bank doesn't reap the benefits of fractional reserve banking. perhaps you should read your own link a little more closely. and your assumption on what a bank makes is funny.

    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
    and then you said that they sell the loan after foreclosure. your post, not mine.

    and i'm sorry, but one bank doesn't reap the benefits of fractional reserve banking. perhaps you should read your own link a little more closely. and your assumption on what a bank makes is funny.
    No, I said that they sell the home after foreclosure. I never mentioned the bank selling the same loan twice.

    You're under the impression that every bank is independent of each other. They're not since they're all part of the Federal Reserve System. Under the Federal Reserve System, all banks are members to it and functions as a single entity using a monopoly on the money supply. This makes the Federal Reserve Bank System a single entity. I suggest you learn more about the type of banking system we have here before you comment on a link that shows how fractional reserve banking actually works. Also, you're confusing the money created out of nothing as pure profit when it's not. The profit comes in from the interest rates paid on the loan. I stated that creating money from the 90% of a deposit is used as a new loan.
    Last edited by The_Patriot; 10-08-10 at 06:38 PM.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by The_Patriot View Post
    No, I said that they sell the home after foreclosure. I never mentioned the bank selling the same loan twice.

    You're under the impression that every bank is independent of each other. They're not since they're all part of the Federal Reserve System. Under the Federal Reserve System, all banks are members to it and functions as a single entity using a monopoly on the money supply. This makes the Federal Reserve Bank System a single entity. I suggest you learn more about the type of banking system we have here before you comment on a link that shows how fractional reserve banking actually works.


    Yes, I believe that the banks were looking to be predatory by not using sound judgment in giving out the loans to those that couldn't afford it. The banks pushed for relaxed lending regulations, which normally would have prevented the sub-prime mess to begin with, in order to make extra money. The banks have the homes on the books with the loans to begin with and the homes being foreclosed on just means that the banks can make more money from a second sale of it.
    what exactly does second sale mean, then? lol.

    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
    what exactly does second sale mean, then? lol.
    A second sale can be either where a person pays the price for the home without a loan in full or they secure a new loan to pay for the home. The new loan is a completely different loan from the original one used to buy the house the first time.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    sooner or later they will have to pay the piper...
    oh, brother, where have you been?

    Half of U.S. Home Loan Modifications Default Again (Update1) - Bloomberg

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by The_Patriot View Post
    A second sale can be either where a person pays the price for the home without a loan in full or they secure a new loan to pay for the home. The new loan is a completely different loan from the original one used to buy the house the first time.
    omg........does your head hurt when it spins around like that? you make absolutely no sense. btw.....banks have to have a BALANCED balance sheet. and they only have to reserve for DEMAND DEPOSITS that are their own liablilites, they don't have to reserve for their OWN freaking cash. they also do not have to reserve for interest bearing deposits. if they sell a piece of property, say a branch building, and deposit that cash.....they don't reserve for it. please, please get a clue.

    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
    omg........does your head hurt when it spins around like that? you make absolutely no sense. btw.....banks have to have a BALANCED balance sheet. and they only have to reserve for DEMAND DEPOSITS that are their own liablilites, they don't have to reserve for their OWN freaking cash. they also do not have to reserve for interest bearing deposits. if they sell a piece of property, say a branch building, and deposit that cash.....they don't reserve for it. please, please get a clue.
    It's actually quite simple to understand.

    The first homeowner, we'll call him Bob, takes out a loan for a 500k house and puts down 10k for it. The bank can take 9k of the 10k to make 90k in money for new loans. The rest has to go into the reserve. He defaults on his loan and the bank forecloses on it. The bank takes the home from Bob and is now stuck with it. Joe sees the house for sale and goes to the bank to get a loan on it. The bank approves Joe's loan and he buys the house with a down payment of 25k. From that 25k, the bank puts back into reserve 2.5k and creates 10 times 22.5k for 225k to be used for new loans.

    As you can see that Joe doesn't take over Bob's loan, but gets a loan of his own since Bob's loan has defaulted and is now closed.

    I never mentioned anything about what you stated, so again you're strawmanning. I suggest you get a clue.
    Last edited by The_Patriot; 10-08-10 at 06:51 PM.

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    Re: BofA halts foreclosures in 50 states

    Look for the Foreclosure Freeze Bailout Bill that the Dems will pass after the midterms.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by liblady View Post
    it actually saves the bank a lot of money in the short term, and in the long term, they may be able to turn those mortgages around. but they aren't doing it out of the kindness in their hearts......
    Once a homeowner has been advised that their home is in foreclosure, they generally, not always, make no further efforts to pay their mortage and begin living rent free. In Illinois, foreclosure can take nine to twelve months. Being able to save $1,500 a month over ten months is tooooo seductive. Most homeowners resign themselves and pat themselves on the back about all the money they're saving.

    These banks should be brought up on criminal charges. The position many foreclosure buyers may find themselves in is that their purchase may be rescinded. What a freakin' nightmare.

    This is disasterous news for the real estate market.
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    Re: BofA halts foreclosures in 50 states

    Quote Originally Posted by apdst View Post
    Look for the Foreclosure Freeze Bailout Bill that the Dems will pass after the midterms.
    I'd soooo much rather we looked for The Bank Official Mass Indictment Bill, but I'm afraid you may be right.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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