Quote:
Originally Posted by onewhippedpuppy
Common, the president of the small bank that holds my mortgage told me it happens often. According to him, because the first few year's worth of payments are mostly interest, they can come up short on the principal and not really lose money. They lose money on paper, but thanks to the interest paid are still ahead, relative to the money loaned. Like they said above, something is much better than nothing.
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Your comment is confusing because it mixed 1st TD holders with 2nd TD holders. The first part of what you are saying is true, as applied to 1st TD holder, but your last sentence suggests you are talking about 2nds.
The first TD holder is usually going to come out ok. The second TD holder is going to pretty much lose the majority of their money, it's a pretty catastrophic event most of the time for the 2nd.