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To: Night Hides Not

Any bank will gladly take back a house that they only loaned 50% of it current value. Think about it. The downside risk is minimal at this point in the market. Loan out 100K on a 200K house. If the borrow defaults they sell it for $175 and make a PROFIT of $75k. Not a bad return on investment. I am simplifing the numbers and I know there are other expenses involved. However, it is still a pretty good bet. I would approve it if I was the bank president.


37 posted on 10/21/2011 8:58:36 AM PDT by woodbutcher1963
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To: woodbutcher1963
Agreed, using your example of 50%. The loans I was referring to had, on average, equity of less than 10%.
38 posted on 10/21/2011 9:32:27 AM PDT by Night Hides Not (My dream ticket for 2012 is John Galt & Dagny Taggart!)
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