[quote=sdrealtor]I disagree that the 1st statement is not accurate. The bank is not recognizing a loss and it is not taking a loss. Are they making as much money as they hoped when the loan documents were first signed? Absolutely not! But that is not a loss. They are getting paid interest and principal on this property and ultimately should recover all their principal. Please show me where the bank is taking a loss.[/quote]

The value of the mortgage bond they hold is now worth much less than it was at the original rate.

That is a loss for the bank (and for taxpayers, if we’re subsidizing it).