Grant Shipley wrote:
On 9/18/05, Dave Smith <[EMAIL PROTECTED]> wrote:
If a disaster happened (read
depression), the banks like to go after the homes that have a ton of
equity in them versus someone who still have 20 years on their
mortgage.
Not if you don't have a loan. That doesn't make sense to me. Why would
the bank try to call the notes that are worth less to them?
It makes perfect sense. The bank would much rather take a home that
is worth 300k but the home owner only owed 100k on that a home that is
worth 300k but with a 295k mortgage. The bank makes 200k by selling
the first one and only 5k on selling the second one.
More likely, bankrupt home owner A (who owes $100k) could sell the home
for $250k to a third party, paying off the loan and still having $150k
to move into a smaller home with zero debt. Bankrupt home owner B would
have no way to buy a new house.
Shane
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