On Mar 22, 8:13*pm, Wes wrote:
"Ed Huntress" wrote:
Sure, on a car. Not on a house. You could have asked any broker or banker, a
year ago, what the chances were you'd get in trouble that way. They'd laugh
you out of the place.

First, they would tell you what I said above. They they'd tell you that once
you'd made two or three years of payments, you'd qualify for a fixed-rate
mortgage before the balloon came due on (what they might call) your "bridge"
loan. Then you could look at all the statistics and see that they're dead
right. Only they weren't, for the first time ever.

Okay, try this. *You buy a new house, the overall market does not go down
but when you go to refinance the banks appraiser notices a crack house next
door and doesn't think your house's market value is high enough to secure
the loan. *By your logic, the bank should forgive principle since the house
is not worth far less than when it was originally purchased.

The bank loans money, the borrower agrees to pay based on the terms of the
contract. *Doesn't matter what the market is doing, you borrowed, you owe. *

Wes
--
"Additionally as a security officer, I carry a gun to protect
government officials but my life isn't worth protecting at home
in their eyes." *Dick Anthony Heller

So if this is true...then why are the banks being bailed out by the
Feds?

Like you said...doesn't matter what the market is doing, you borrowed,
you owe.

That is unless you are Bear Stearns.

Want to explain why banks get a "Go Free" card on their making bad
loans?

TMT