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Dangerous Woman

Why Are The Banks Different

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When a contractor who was building two schemes for me went bust I entered negotiations with the receiver. The clients paid an agreed amount considerably less than less than would have been owed if the contractor had remained solvent and some creditors got something (VAT man first followed by taxman, then suppliers etc).

From these threads it seems that if a bank goes bust, shareholders lose everything, depositors lose their savings (and are compensated by the government) and the mortgages are still owed.

I ask as someone with a RBS mortgage.

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When a contractor who was building two schemes for me went bust I entered negotiations with the receiver. The clients paid an agreed amount considerably less than less than would have been owed if the contractor had remained solvent and some creditors got something (VAT man first followed by taxman, then suppliers etc).

From these threads it seems that if a bank goes bust, shareholders lose everything, depositors lose their savings (and are compensated by the government) and the mortgages are still owed.

I ask as someone with a RBS mortgage.

your mortgage probably isn't owned by RBS anymore and you will still have to pay it if they go bust.

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Because the banks owe money to each other, they have a very very small percentage of capital and are more in debt than any company?

Your mortgage debt is an asset and will probably be sold onto another bank at a fraction of its value, as the bank fails to pay off its massive 'debts' to other banks then savers.

A What is money thread will help explain why banks are in debt to each other many times over.

Edited by moosetea

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Because banks give politicians nice jobs when they quit politics and nice back handers while they are in power. That's why they are different. They are the real power that runs the country, and want you as a debt slave for the rest of your life.

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Because the banks owe money to each other, they have a very very small percentage of capital and are more in debt than any company?

Your mortgage debt is an asset and will probably be sold onto another bank at a fraction of its value, as the bank fails to pay off its massive 'debts' to other banks then savers.

A What is money thread will help explain why banks are in debt to each other many times over.

Thankyou Moose. My slightly tongue in cheek point was why can't I have the benefit of the loss in value of the asset?

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Thankyou Moose. My slightly tongue in cheek point was why can't I have the benefit of the loss in value of the asset?

you can if you/your company goes bankrupt :P

Edited by moosetea

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How does that work?

Like this (the day before RBS was bankrupted)

http://www.telegraph.co.uk/finance/newsbys...ritten-off.html

Your US arm of your business goes bankrupt, but you keep your 3.9b fortune and your £41m house in london :P

http://www.icis.com/Articles/2009/01/06/91...tcy-filing.html

http://www.lyondellbasell.com/Index.htm

Edited by moosetea

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Because banks give politicians nice jobs when they quit politics and nice back handers while they are in power. That's why they are different. They are the real power that runs the country, and want you as a debt slave for the rest of your life.

+1, beat me to it, word for word almost.

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Thankyou Moose. My slightly tongue in cheek point was why can't I have the benefit of the loss in value of the asset?

The mortgage contract is a form of promissory note. You are the payer aren't bankrupt. It doesn't matter who is on the other side.

Which asset are you talking about losing value? Your own house? The mortgage is not impaired unless you default.

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The mortgage contract is a form of promissory note. You are the payer aren't bankrupt. It doesn't matter who is on the other side.

Which asset are you talking about losing value? Your own house? The mortgage is not impaired unless you default.

My asset is a lovely shiny chemical company in the USA - oh no it's not. Pity.

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The mortgage contract is a form of promissory note. You are the payer aren't bankrupt. It doesn't matter who is on the other side.

Which asset are you talking about losing value? Your own house? The mortgage is not impaired unless you default.

"The mortgage"... isn't that just a contract between two parties? If the bank goes under, you are under no obligation to pay the company who takes it on. Your contract is null and void.

...However, the asset the (new) bank has is your house. I guess they would have just as much right to say the previous contract is void, and boot you out of the house if they wanted to.

Might be an easy out option for people in NE though.

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"The mortgage"... isn't that just a contract between two parties? If the bank goes under, you are under no obligation to pay the company who takes it on. Your contract is null and void.

...However, the asset the (new) bank has is your house. I guess they would have just as much right to say the previous contract is void, and boot you out of the house if they wanted to.

Might be an easy out option for people in NE though.

Excellent signature! Who is Prince Charming in this scenario?

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My asset is a lovely shiny chemical company in the USA - oh no it's not. Pity.

You have 100k mortgage on a house worth 200k, you start a company called 'my house' and sell your house to the company, the company then pays you a salary as it re-mortgages, the company goes bankrupt because it cant raise any more debt on the house... You have 200k in the bank no house and no mortgage, 100k from the original sale to the company, 100k from the house MEW. The asset of the house is transferred to the bank and sold at auction which you attend, you are the winning bidder at 150k, you pay cash and have 50k in the bank...

You are '150k' richer :)

Then you are arrested for fraud for being too obvious :P , the trick is to make it look like an accident through a complicated network of different companies assets and employees....

Edited by moosetea

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But the company buying the mortgages off the bust bank.. say they pay 50p in the pound. Why not offer all mortgagees to pay off their mortgage at 70p in the pound instead?

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But the company buying the mortgages off the bust bank.. say they pay 50p in the pound. Why not offer all mortgagees to pay off their mortgage at 70p in the pound instead?

Presumably because they are a buch of greedy banksters who want to squeeze every last penny they can.

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"The mortgage"... isn't that just a contract between two parties? If the bank goes under, you are under no obligation to pay the company who takes it on. Your contract is null and void.

...However, the asset the (new) bank has is your house. I guess they would have just as much right to say the previous contract is void, and boot you out of the house if they wanted to.

Might be an easy out option for people in NE though.

Its is a debt associated with a property, the debt is an asset that sold onto someone else...

Its the same with cars

If the loan remains unpaid when the car changes hands, you stand to lose the car or the money outstanding on it.

https://www.hpicheck.com/newfrontend/what_check.jsp

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But the company buying the mortgages off the bust bank.. say they pay 50p in the pound. Why not offer all mortgagees to pay off their mortgage at 70p in the pound instead?

Your buying ALOT of mortgages not one. Things are cheaper when you buy in bulk.

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You have 100k mortgage on a house worth 200k, you start a company called 'my house' and sell your house to the company, the company then pays you a salary as it re-mortgages, the company goes bankrupt because it cant raise any more debt on the house... You have 200k in the bank no house and no mortgage, 100k from the original sale to the company, 100k from the house MEW. The asset of the house is transferred to the bank and sold at auction which you attend, you are the winning bidder at 150k, you pay cash and have 50k in the bank...

You are '150k' richer :)

Then you are arrested for fraud for being too obvious :P , the trick is to make it look like an accident through a complicated network of different companies assets and employees....

They would never arrest me as I am a Russian oligarch and I have plenty plutonium in my handbag.

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"The mortgage"... isn't that just a contract between two parties? If the bank goes under, you are under no obligation to pay the company who takes it on. Your contract is null and void.

...However, the asset the (new) bank has is your house. I guess they would have just as much right to say the previous contract is void, and boot you out of the house if they wanted to.

Might be an easy out option for people in NE though.

Mortgage contracts are written for the purpose of being transferrable assets, securitisation of mortgages has been practiced since 1970.

As such they are not simple covenants under contract law between the bank and the lender.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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