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The bank gave you $150k to buy your house. Then some banker who owned your $150k mortgage note got scared and sold it back to you at a firesale price

What does that $150k note say? "Joe Blow will pay you $1k a month for the next 28 years" (the house owner is 2 years into his mortgage)? Isn't that note worth a lot more than $150k to someone that wants to buy it? How would you determine what its value is worth?

Bear with me as thinking about this makes my head hurt. Perhaps I should write a computer program if I knew all the variables involved.

Let me see if I can make this easier for you. The holder of the note goes bankrupt. He now has to get money to stay in business at 6%. He is only earning 5% for 30yrs and his cost of money is going to go higher than 6%. So, fire sale happens. He sells his notes for 10¢ on the dollar. This can only go on for as long as he has notes to sell or for as long as he sell them them 100 notes at .1¢ on the dollar. Obviously very early he is going belly up. So everyone just waits till he does and then everything goes to auction in the BK and all of the solvent banks gather for the frenzy and wait in unison for the 10¢ on the dollar or less before they put up a bid.

It happened with the S & L's and 400+ billion was footed by the tax payers through FDIC. It won't happen this time, we're talking TRILLIONS !

In other words they are worth what they can get at auction in a fire sale regardless of the dollar value over 30yrs.