You’ll show up one day and there’ll be a notice that this bank has been taken over the FTIC and if you have money there, it’ll take a couple of days to get it.<\/p>\n
Or Bank of America buys them out for $2 a share.<\/p>\n
If you deposit a $100 in a bank, they only have to hold a couple of bucks and lend the rest. They may give some home boy in Riverside a $95 loan. They put it on their books as a $95 asset. They get 7% from this bloke and they pay you 2%.<\/p>\n
Downey, First Federal, Washington Mutual, Fremont. I doubt their reserves are enough to absorb their losses. They have a ton of negative amortization on their books.<\/p>\n
According to Wikipedia<\/a>: "In finance<\/a>, negative amortization<\/strong>, also known as NegAm<\/strong>, occurs whenever the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases. As an amortization<\/a> method the shorted amount (difference between interest and repayment) is then added to the total amount owed to the lender. Such a practice would have to be agreed upon before shorting the payment so as to avoid default on payment. Also known as deferred interest<\/strong> or Graduated Payment Mortgage<\/a><\/strong> (GPM<\/strong>). This method is generally used in an introductory period before loan payments exceed interest and the loan becomes self-amortizing."<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" You’ll show up one day and there’ll be a notice that this bank has been taken over the FTIC and if you have money there, it’ll take a couple of days to get it. Or Bank of America buys them … Continue reading