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Last time I checked if I just immediately default on my mortgage the bank doesn't just get to go get their money back from the seller's account. Even if the sel
by sidewndr46 3y ago
Last time I checked if I just immediately default on my mortgage the bank doesn't just get to go get their money back from the seller's account. Even if the seller was actually using the same bank.
Also the seller is now less a real asset. Their liquid asset worth hopefully went up in the sale. But their total net worth should be around the same, minus any fees they paid during the transaction.
- JumpCrisscross 3y agoOkay, I see what you're saying. The terms this discussion craves are liquidity and capital requirements. Mortgages are assesed on risk-based metrics in terms of how much equity a bank must hold against each dollar loaned, and how much liquidity as well. Apologies. The comment you're responding to makes multiple fundamental errors [1], so the discussion is a tad tough to follow. [1] Banks have enough capital to absorb these losses, capital isn't cash, loss reserves aren't cash, there is no chain reaction of defaults in basic lending, bank failures and rescues aren't inflationary