4 ms·

> It’s like the bank banning selling your home then repossessing it when the value falls. Apples and oranges. If you bought a house on margin, the way a broker

> It’s like the bank banning selling your home then repossessing it when the value falls. Apples and oranges. If you bought a house on margin, the way a brokerage defines margin, they would absolutely be allowed to do that. Margin and mortgage are fundamentally different types of loans. I agree that halting buys was absolutely wrong. Definitely see where you're coming from, if you look at the two actions together..it doesn't paint a very pretty picture.

cwkoss 6y ago
Isn't buying a house on margin... basically just a normal mortgage?
- Animats 6y ago
  You don't get a margin call if your house or car is underwater. You can just keep making the payments until you own it.
  - baybal2 6y ago
    > You don't get a margin call if your house or car is underwater. Except... You can! If you ever took a mortgage, take a very, very, very good look on the loan agreement. A surprising amount of banks simply put it as "bank reserves the right to recall the loan in full, at its sole discretion, at any moment"
    - deleted 6y ago
      [deleted]
- Spooky23 6y ago
  No. A mortgage is a collateralized loan. Margin loans more like a performance bond. Unlike a mortgage, it gets called in when you cannot cover the loan. Speculation with margin is dumb for most people.
- thebean11 6y ago
  No like I said they are fundamentally different. In a normal mortgage the bank cannot take your house if you make payments. With margin they can force you to sell if your account becomes too risky (usually happens because your positions lost value, but could also happen in cases like these where an investment is deemed to have a high probability of losing value). They can do this even if you are paying the interest on your margin on time.
  - baybal2 6y ago
    > In a normal mortgage the bank cannot take your house if you make payments. Depending on a loan agreement... It can The last time this has happened en masse was as recently as 12 years ago. Since then, people started reading loan agreements a bit more carefully, hence the decline in the number of banks demanding completely unconditional recall clauses.

cwkoss 6y ago

Isn't buying a house on margin... basically just a normal mortgage?

Animats 6y ago
You don't get a margin call if your house or car is underwater. You can just keep making the payments until you own it.
- baybal2 6y ago
  > You don't get a margin call if your house or car is underwater. Except... You can! If you ever took a mortgage, take a very, very, very good look on the loan agreement. A surprising amount of banks simply put it as "bank reserves the right to recall the loan in full, at its sole discretion, at any moment"
  - deleted 6y ago
    [deleted]
Spooky23 6y ago
No. A mortgage is a collateralized loan. Margin loans more like a performance bond. Unlike a mortgage, it gets called in when you cannot cover the loan. Speculation with margin is dumb for most people.
thebean11 6y ago
No like I said they are fundamentally different. In a normal mortgage the bank cannot take your house if you make payments. With margin they can force you to sell if your account becomes too risky (usually happens because your positions lost value, but could also happen in cases like these where an investment is deemed to have a high probability of losing value). They can do this even if you are paying the interest on your margin on time.
- baybal2 6y ago
  > In a normal mortgage the bank cannot take your house if you make payments. Depending on a loan agreement... It can The last time this has happened en masse was as recently as 12 years ago. Since then, people started reading loan agreements a bit more carefully, hence the decline in the number of banks demanding completely unconditional recall clauses.