If you would like to submit a contribution to our Readers Blog section then follow this link. Be sure to include your full name, address and contact number otherwise your submission will not be considered for publication. We will contact you prior to publication.

Banks have already been paid for mortgages

Since our economic commentators won’t ask this, I will.

If banks sell mortgages to investors, via the securitisation industry, how were they ever bust?

Pension funds, insurance companies, hedge funds, etc, buy mortgages and pay banks the principal, plus a premium up front as a lump-sum payment.

Therefore, the bank is paid in full, once, for the mortgage. The monthly payments of the homeowners are passed by the banks to the investors. Over the life of the mortgage, the investor earns more than they paid up-front to the banks, due to interest payments.

This is admitted — albeit grudgingly — by banks. They can no longer deny securitisation. But how do they explain being bust? They should be in extra credit, from the profit above the principal that the investor paid to them.

Are banks keeping shadow books? Is their securitised income declared for tax?

Where is that money?

How did the banks all arrive in Government Buildings in 2008, saying they needed to be bailed out overnight or the country would go bust, when their mortgages were all already paid in full? How can any bank in Ireland lay claim to the title of any house in Ireland if they have sold this right to others?

Henry Ford said: “it is well enough that people of the nation do not understand our banking and money system, for, if they did, I believe there would be a revolution.”

Barry Fitzgerald

Lissarda

Cork

© Irish Examiner Ltd. All rights reserved

Email Updates

Receive our lunchtime briefing straight to your inbox

More in this Section

Readers blog: Lies, damned lies and statistics as you've never thought of them before

Readers blog: NI and Scotland's love affair with Europe born in antipathy

Readers blog: The best way to stop terrorism is to stop participating in it

Readers Blog: Target the shame as we reflect on Eating Disorder Awareness Week


Breaking Stories

Micheál Martin: ‘Hidden’ Government agenda at heart of escalating Bus Éireann crisis

Three-year-old boy stepped into jacuzzi and drowned at hotel Kids Club

Internal audit into Templemore Garda training college recommends host of changes

The judges have chosen the winners of the Hennessy Literary Awards

Lifestyle

Technology in school is about collaboration and ideas - not passively swiping at a screen

Are left-handed people in their right minds?

Liz Bonnin gets a 'sobering reminder' of the power of nature in series on the Galapagos

There's little help or understanding about Lyme disease in Ireland

More From The Irish Examiner