"So having just stated that the current homeowner will always pay more than the bank could make on a foreclosure sale, I think you did, indeed, just argue away the existence of foreclosure. " Huh? How?
Banks do lose money on foreclosures.
Also, I did not state that the current homeowner is always willing to pay more than the bank could make on a foreclosure (though that is very often the case), I stated that the current owner is (on average) willing to pay more than other people would, if they can afford to, and if they want to stay there.
I did misstate one thing: payments "that are higher" isn't necessarily it, only that over the long term they'd add up to more for the bank. That is, the individual payments may not be higher, the value of what's paid over time is higher, is what I meant.
This is particularly true in a situation where this is happening to a lot of houses all at once: the more foreclosed & re-sold, the lower the value of all houses, to everyone, so everyone loses out.
no subject
Banks do lose money on foreclosures.
Also, I did not state that the current homeowner is always willing to pay more than the bank could make on a foreclosure (though that is very often the case), I stated that the current owner is (on average) willing to pay more than other people would, if they can afford to, and if they want to stay there.
I did misstate one thing: payments "that are higher" isn't necessarily it, only that over the long term they'd add up to more for the bank. That is, the individual payments may not be higher, the value of what's paid over time is higher, is what I meant.
This is particularly true in a situation where this is happening to a lot of houses all at once: the more foreclosed & re-sold, the lower the value of all houses, to everyone, so everyone loses out.