Why Banks WON'T help homeowners.

I think I realized why the banks don’t want to help people and are rather willing to take their houses back.

Here’s a great example:

When you bought your house, you agreed to pay 6.375% over 30 years. You bought your house for $200,000. Your payments are $1247.74 per month.
After you made your first payment, you realized you paid $1062.50 interest and ONLY $185.24 on the capital on your house.

That means you actually paid 85.15% interest on your loan. Great return on their money for the banks, horrible deal for you.

Now you own your house 10 years. Now you still pay $1247.74 per month, BUT now the bank only gets $899.75. That's a 72.11% return on their money.

After 20 years of paying your monthly $1247.74, they only get $590.55, still 47% return on their money.

Now you run into some trouble, you lost your job and can’t make the payments.
You call the bank, they say you owe more on your house than it’s worth.
They don’t want to help and after numerous calls, they keep telling you to rather give the keys back and foreclose on your house.... they say it's your only option...

They do it for the money people…

They know they may take a loss now, BUT they sell the property to someone else, slap a 30 year mortgage on there and get themselves right back up in the +80% return for their money.

All the bail-out money they received isn’t helping. They are keeping most and only help a few people here and there to save face….

Your thoughts…

I just wanted to point out that due to fractional reserve banking the bank is actually making a lot more than even you think. If you borrowed 100k from the bank, you should know that they only had to come up with a percentage, like 10%, while the other 90% was created out of thin air. So, they only loaned you 10k, you promised to repay 100k + interest...and more than likely were forced to buy private mortgage insurance on the bank's behalf against yourself which also pays the bank in case of your default. And they say banks are failing...lol:..failing to tell you the truth!

You forgot to mention, and most people forgot this as well. 80% or so homeowners pay PMI. Insurance for you not paying on your house. The banks profit greatly from this, it just happened that past accounting practices frowned on this procedure, and the banks books would look bad due to it, until the house is foreclosed on and it is off the books.
Now, the accounting practices allow the banks to use future projected income as current investments.

It says volumes about banks that prey on people that dont understand what their getting them selfs into.

Originally posted by merodock
It says volumes about banks that prey on people that dont understand what their getting them selfs into.

I have yet to see a banker hold a gun to the head of a person.
If you don't read the contract, it is on you.
If you don't understand, don't sign.

Originally posted by macman

Originally posted by merodock
It says volumes about banks that prey on people that dont understand what their getting them selfs into.

I have yet to see a banker hold a gun to the head of a person.
If you don't read the contract, it is on you.
If you don't understand, don't sign.

If everyone read and understood the contract...banks would very rarely make loans. No the bank isn't holding a gun to anyone's head but life is...I mean how else are you going to get the money to buy a home or car? The gov't isn't holding a gun to your head to pay taxes or do any number of other things...but you do them anyway because ultimately you know you have no choice.