|Authored by: jonathon on Wednesday, May 30 2012 @ 12:04 PM EDT|
|>Now think of the chaos if £55 billion of mortgages were called in when the|
other banks were not in a position to grant new mortgages to replace them.
Short term, that would have pushed around 70% of the banks into receivership.
Long term, it would force banks to exercise fiscal prudence when lending money.
>Several hundred thousand families getting letters through the door saying
"Pay us the tens of thousands of pounds you owe us" with no way to
raise the money but put their home up for sale.
If those mortgages are held as individual loans, then they would be sold to a
company that specializes in collecting "uncollectable debt", at
pennies on the dollar. Non-delinquent accounts would be untouched. Delinquent
accounts would be offered a settlement, or payment arrangement. Delinquent
accounts that were not making payments would be foreclosed upon.
If they are not individual loans, but "security packages", then
everybody loses, because there are no individuals or organizations with the
legal right, and legal authority to accept payments, negotiate payments, or
release the mortgage.
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