Tagged: Oversimplification

Nov 17

Understanding current bank and bad loan crisis?

bad loan
Okay, the Federal Government will be stepping in to help banks with bad loans on mortgages to help prevent more bank problems. If the loan went bad and the bank foreclosed on the house, then the bank gets the asset. Why does the bank need federal money? Does the bank get the asset and the money? I know this is oversimplification, but any help is appreciated.
Thanks.

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