Creating money

[Lancer]

If I sell my house and hold the morgage, then sell the morgage for cash, didn't I just create money? I hold the cash, the buyer of the morgage holds the morgae in roughly the same amount, yet there is only one house...

Right?

[Sava]

sell the mortgage? it doesn't work that way... the mortage is simply a loan that you payback. You can't sell it, you would be giving someone money.

[GePap]

Wouldnt buying a mortage be like buying someone's debts? (people do do this)

[Lancer]

"the mortage is simply a loan that you payback."

Not if I hold the mortgage.

[Lancer]

GePap, true. If I hold a mortgage for $100,000, I might sell it to someone for $90,000 cash.

[Sava]

Originally posted by Lancer
"the mortage is simply a loan that you payback."

Not if I hold the mortgage.

But it's debt... you owe your creditor money. It's not your's to sell. If the creditor decides to sell your mortgage, you just have a different entity to make your mortgage payments out to. Somehow, your logic train flew off the tracks.

[Sava]

Originally posted by Lancer
GePap, true. If I hold a mortgage for $100,000, I might sell it to someone for $90,000 cash.

You would still have to pay it back Lancer... if you did that, you'd lose 10 grand... not make 10 grand.

[Lancer]

I'm the creditor. I hold the mortgage.

[GePap]

No he doesn;t. The other person bought the privalege of paying the bank back. I am still unclear why some folks buy the debts of others, but they do do it.

edit: woops.

Why would someone buy your mortage Lancer? how do they make money?

[Sava]

Originally posted by Lancer
I'm the creditor. I hold the mortgage.

a mortgage is a loan based upon the value of a house... it's debt that you pay back...

Nobody will buy debt... the "purchaser" of debt would give you $100,000 grand... then still have to pay $100,000 grand to the bank. Essentially, they are getting nothing... they end up paying $200,000.

[Sava]

I am still unclear why some folks buy the debts of others, but they do do it.

It's a valid investment. The buyer of the debt pays off the remaining principle while the debtee just gives the money to the buyer. The buyer get's the money back with interest.

Lancer's idea doesn't make sense, hopefully he will realize where he made the mistake.

[Agathon]

Great! A thread on forgery.

[Imran Siddiqui]

As much as it pains me to say it... Sava is right .

A mortgage is a debt to the bank. If you sell it, you may end up ahead in the end, because the buyer of your debt my charge a lower interest rate than the bank is charging (in order to get you to sell your mortgage to them and then pay the interest to them instead of to the bank), but that is the only way you will end up ahead.

The debt on the principal is still there, though.

[Sava]

Originally posted by Imran Siddiqui
As much as it pains me to say it... Sava is right .

bah, I'm right on more things than you'd like to admit

[Imran Siddiqui]

Not really .