The TOTAL has to, by definition, be less, because otherwise it wouldn't cost that much to deal with the bad debt.
i don't think that's true.
say i've taken out a loan to buy a house, that i still have $100,000 in payments left on. the market just crashed and now the bank thinks they'll probably only ever see 20% of that money from me. with that understanding, it'd be a fair trade for them to sell the mortgage to someone else for $20,000. but if the bank's right, it would cost another $80,000 for someone to "make my mortgage not fail."
i gather that in the current situation, the problem is that nobody really knows how to guess how much of the money they expect to see again. that mortgage could only be worth $1,000, or $100. faced with the choice of paying $1,000 each for millions of crappy mortgages like this one or paying a million homeowners $99,000 each to save their mortgages, which do you think the government should do?
i do see complaints that those aren't the only choices, coupled with the fear that the government is really going to pay $50,000 for that $1,000 mortgage because the bailout is run by people who like bankers. those complaints make some sense to me.
no subject
i don't think that's true.
say i've taken out a loan to buy a house, that i still have $100,000 in payments left on. the market just crashed and now the bank thinks they'll probably only ever see 20% of that money from me. with that understanding, it'd be a fair trade for them to sell the mortgage to someone else for $20,000. but if the bank's right, it would cost another $80,000 for someone to "make my mortgage not fail."
i gather that in the current situation, the problem is that nobody really knows how to guess how much of the money they expect to see again. that mortgage could only be worth $1,000, or $100. faced with the choice of paying $1,000 each for millions of crappy mortgages like this one or paying a million homeowners $99,000 each to save their mortgages, which do you think the government should do?
i do see complaints that those aren't the only choices, coupled with the fear that the government is really going to pay $50,000 for that $1,000 mortgage because the bailout is run by people who like bankers. those complaints make some sense to me.