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But while the household debt is huge, isn't it naturally balanced by the equally massive collateral the banks have in the houses themselves? I mean, sure Joe Am
by matt-attack 9y ago
But while the household debt is huge, isn't it naturally balanced by the equally massive collateral the banks have in the houses themselves? I mean, sure Joe America has a $500k mortgage, but the bank has first position on Joe's house which is worth $675k.
- tveita 9y ago> first position on Joe's house which is worth $675k Only in a healthy housing market. In an economic downturn where a lot of people are defaulting, the bank will not be able to sell the house for anywhere near that price.