UT, you are right. It's not in the interest of the banks to...

  1. 249 Posts.
    UT, you are right. It's not in the interest of the banks to foreclose. It is bad PR.

    In the good times they will give as much breathing space to borrowers in trouble.

    Problem arise when the housing sector as a whole shows sign of stress and a major correction with default rates & trend exponentially increase.

    Such as our banks reliance on the mortgage business for thier survival, they have no choice but to foreclose (if thing get quite bad). As you know, the banks have to maintain a certain level (ratio) of assets (against what they loan out) whose quality if deteriorates will have their share price punished.

    That would be in worse interest of the banks IMO.

 
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