How is this allowed to happen?

[Dill]

(01-08-2019, 10:45 PM)cBenton Wrote: See post 3.

Many banks know borrowers can't pay the secondary loans, and they don't care. Worst that happens to them is that family owes them a huge sum of money, they collect a big chunk of it when they file bankruptcy or die, the bank resells the house at a price it wants and gets to write off the losses as tax breaks against accrued profits. The system is set up for banks to increase dollars over the long term.

But post 3 was less wordy about it.

Seems like a serious moral hazard.  But can a bank really recoup 500,000 on a 300,000 dollar home by writing off losses?