Even if it dropped by 50% they still made a profit AND got interest along the way. Assuming prices stabilize, they bought the dip by default.
Granted, the question is, can they stop the local government from making things worse? Or can they profit off of the government by selling/renting the property to them for their Socialist causes?
Edit: The free market has little interest in the mall but the government has near infinite money that it can extract from its citizens to finance all kinds of boondoggles. There's plenty of money to be made in sham "industries" like the green stuff, "refugees" and so on.
Companies who made their money at the game have just packed it in ... unless the bank's plan is to bulldoze the site in preparation for pod housing, how is the bank going to turn a profit on such a place?
Migrant housing, "education" or community center or some other bullshit that the government will sink billions into.
For example: here in Germany the government loves to pay expensive hotels to house "refugees". However, recently they had a new idea: how about we just buy those hotels?
There's money to be made. You just have to follow the most retarded politicians around.
Sounds like the money lenders are getting a lot of properties for pennies on the dollar. Don't you love the smell of Weimar in the morning?
Technically the banks are getting screwed when this happens.
The borrower provided a few % of equity.
The bank provided almost 100% of equity.
The borrower is sending the keys back because they know the property has fallen by about 40~50% in value.
The bank shareholders paid almost 100% and got something worth 50~60% in value.
The lenders don't pay 100% of the original value though. In the previous example, which has some numbers, they basically paid less than half the original value: https://kotakuinaction2.win/p/16bPQQRINI/-jingle-mail--725-million-boogal/c/
Even if it dropped by 50% they still made a profit AND got interest along the way. Assuming prices stabilize, they bought the dip by default.
Granted, the question is, can they stop the local government from making things worse? Or can they profit off of the government by selling/renting the property to them for their Socialist causes?
Edit: The free market has little interest in the mall but the government has near infinite money that it can extract from its citizens to finance all kinds of boondoggles. There's plenty of money to be made in sham "industries" like the green stuff, "refugees" and so on.
Oh you mean because the property has risen in value since the owners bought it?
In that case I agree with you.
But the thing is - the owners who usually mail the keys back are the ones with negative equity. Not the ones with positive equity!
Kinda, but what good is it going to do them?
Companies who made their money at the game have just packed it in ... unless the bank's plan is to bulldoze the site in preparation for pod housing, how is the bank going to turn a profit on such a place?
Migrant housing, "education" or community center or some other bullshit that the government will sink billions into.
For example: here in Germany the government loves to pay expensive hotels to house "refugees". However, recently they had a new idea: how about we just buy those hotels?
There's money to be made. You just have to follow the most retarded politicians around.