There's no shortage in the supply of property in the States, so those who have been foreclosed on will simply rent or buy somewhere cheaper.Where are all those thousands of people whose homes have been foreclosed going to live, wouldn't it be feasible for the banks to rent out the homes rather than throw people out on the streets.
I understand these loans were given to the poorest parts of society and that for about the first two years the interest rate was fixed at a relatively low rate and subsequently increased hugely causing many to default. Would it not be better for the banks to reduce the interest rates to an affordable rate on all these loans, maybe extending the term and not go to the expense of foreclosing on property that seems to be pretty well worthless? And if so why are they not doing this as all these foreclosures result in all property being devalued (Cleveland, Ohio) and more people defaulting and creating a crisis in banking. Is this too simplistic?
There's no shortage in the supply of property in the States, so those who have been foreclosed on will simply rent or buy somewhere cheaper.
Since the banks are in the business of making money I don't think your suggestion is feasable. Holding on to a pool of depreciating assets which give them a pitiful yield is hardly going to delight their shareholders.
Yes.I understand these loans were given to the poorest parts of society and that for about the first two years the interest rate was fixed at a relatively low rate and subsequently increased hugely causing many to default. Would it not be better for the banks to reduce the interest rates to an affordable rate on all these loans, maybe extending the term and not go to the expense of foreclosing on property that seems to be pretty well worthless? And if so why are they not doing this as all these foreclosures result in all property being devalued (Cleveland, Ohio) and more people defaulting and creating a crisis in banking. Is this too simplistic?
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