[quote=XBoxBoy][quote]
As an example, Taleb said banks should not be sending demands for larger and larger sums from homeowner in arrears on their mortgage. Instead the bank should offer to lower the monthly payments in return for part-ownership of the property.
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When I see comments like this I just shake my head. Doesn’t Taleb understand that the bank already owns 100% of the house since the mortgage is more than the house’s market value? How can the bank take part-ownership when they already own 100% of the house?
I agree that it’s disheartening that our government leaders don’t know what’s going on, but it’s just as disheartening to see “experts” who also don’t get it.
XBoxBoy
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They have 100% of the risk now but no ownership until they take the property.
He is saying take part ownership now in exchange for loan modifications.
Basically selling part of the property to the Bank.
It would change the accounting treatment of how the loans are valued.
