How is this allowed to happen?

[*Nately120*]

(01-09-2019, 02:50 PM)fredtoast Wrote: No.  There is a $200K real loss that can not be recouped by just "writing it off".  All you save when you write off a loss is the amount of tax you would have paid on that amount of income.

Banks often sell the debt to third parties so they don't take the loss.  Many times the mortgages are bundled together and shares are sold to individual investors.  This is why so many retirement funds and other institutions were in trouble during the '08 crisis.  They held shares in mortgaged back investment funds that were going to go broke.  And the credit default swaps that they had purchased to protect them from the funds going broke were useless because credit default swaps are not regulated like regular insurance policies.  Sp the companies that wrote them did not have the funds to cover the losses.

And when we bailed out the lenders and asked for some regulations to make sure this never happened again their heads exploded.  They had to get the bail out money with "no strings attached" because regulation of investment markets destroy profits.

That sounds kinda complicated.  Can't we just blame poor people and minorities?