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


Breaking Stories

Australian police appealing for information on missing Irish man Craig Lambe

Irish workers could be forced to pay 10% of wages in new pension scheme

40% reduction in heart attack deaths since 2007 - report

Central Bank warns households about taking on new debt, 10 years on from financial crisis

Lifestyle

No wee feat: Daniel back in the charts with new album this Christmas

The League Of Gentlemen sketch troupe back on TV screens after 15 years

Get ready for the Jedi in latest Star Wars instalment

A heavy burden for such young shoulders caring for parents this Christmas

More From The Irish Examiner