[quote=CA renter][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).[/quote]
There is no loss until it is realized and they get less money then they put out. Its all paper losses and gains until then. Making less than you hoped for is not a loss. If I had a contract to earne $1M this year but got injured and only made $500K would you say I lost $500K?
