tek-monkey
wanna see my snake?
I'm sure I don't need to go into detail about the huge financial issues going on at the moment, but I do have a serious question. Firstly, in a vastly simplified overview, the problem:
Banks lend money to people who can't afford it
People stop paying banks
Banks have no money, so if savers withdraw they cannot pay
Savers find out, panic and withdraw
Bank folds
Sound about right? Now my question, and it may be a very silly one but I can't think of an answer, is this. Why not just reposess and rent the house out, rather than selling at a loss? People need to live somewhere, those defaulting on bigger properties can downshift and rent tthe one that just got reposessed. Houses don't exactly stand empty that long, mass selling of properties drives values down so more is lost on each house, it just makes no sense.
Or have I really missed something here?
Banks lend money to people who can't afford it
People stop paying banks
Banks have no money, so if savers withdraw they cannot pay
Savers find out, panic and withdraw
Bank folds
Sound about right? Now my question, and it may be a very silly one but I can't think of an answer, is this. Why not just reposess and rent the house out, rather than selling at a loss? People need to live somewhere, those defaulting on bigger properties can downshift and rent tthe one that just got reposessed. Houses don't exactly stand empty that long, mass selling of properties drives values down so more is lost on each house, it just makes no sense.
Or have I really missed something here?