Replying to freakazoid

which part of the banking not pocketing-in your collateral you don't get?

if you had a mortage you would know the collateral goes to the seller on the closing date

and the bank loans you the remaining 80% of the total sale price

collateral is made so you feel the obligation to pay off your debt even if you carry the loan until your death (and that's the plan)
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Fiat Shenanigans 🤡🌎 1y ago

No. The bank doesn't care about you having "skin in the game." You're misinformed. They only care about risk. How much can they recoup in a short sale after they reposes your home?

When they start offering zero down mortgages in a housing bull market it's because they are confident that the cash value of your home will keep increasing, so they're willing to finance 100% of the sale price instead of just 80%.

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freakazoid 1y ago

do you really think the RISK of defaulting a loan (ANY loan) is the same for:

Person 1: paid 20% collateral

Person 2: paid NOTHING as collateral

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Think again...

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Sorry to burst your bubble on the "patrol of the truth" my dude, but *you* are misinformed.

Putting collateral or not, factors-in A LOT during the underwritting process (you know they have underwritters signing-off before releasing the loans, right?).

Again: it's ok to not being aware of this if you've never went to this process. Now ignoring this fact just to prove a point in a conversation with another anon it's another completely different thing. Have a great day!