Short answer for why banks like home loans is because they’re a long and, unless you’re doing that shady 2008 sub prime shit, a very safe revenue stream. In order to get a home loan, a bank runs a very detailed financial risk assessment on all your assets and they have an assessed asset that they can sell if you foreclose. Mortgages can also be securitized and used to sell mortgage backed securities.
There are other reasons why a discharge can occur. Disability, school closure, fraud, etc. Moreover, there are other way to get out of total or partial loan repayment. For example, student loan cancellation and forgiveness. There has been over $160 billion in student loan debt relief during this administration in the US.
By my point is, mortgages are great for banks. They are steady stream of boring and predictable revenue that they don’t need to think much about.
Also, in the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T.
If you start to look into the national debt stats and the annual reports for the big banks, it will become very clear why mortgages are still a very very popular product.
Short answer for why banks like home loans is because they’re a long and, unless you’re doing that shady 2008 sub prime shit, a very safe revenue stream. In order to get a home loan, a bank runs a very detailed financial risk assessment on all your assets and they have an assessed asset that they can sell if you foreclose. Mortgages can also be securitized and used to sell mortgage backed securities.
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There are other reasons why a discharge can occur. Disability, school closure, fraud, etc. Moreover, there are other way to get out of total or partial loan repayment. For example, student loan cancellation and forgiveness. There has been over $160 billion in student loan debt relief during this administration in the US.
By my point is, mortgages are great for banks. They are steady stream of boring and predictable revenue that they don’t need to think much about.
Also, in the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T.
If you start to look into the national debt stats and the annual reports for the big banks, it will become very clear why mortgages are still a very very popular product.
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