Like many other banks and finance companies, Green Tree used a process called securitization to resell its home loans to outside investors. Green Tree grouped thousands of these small loans into a pool worth hundreds of millions of dollars.
I see a green tree. And to me it is green. And you would call the tree green also. And we would agree on this. But is the colour you see as green the same colour I see as green?
As well as, we know, as a real estate developer, [Donald Trump] has hundreds of millions of dollars in debt, in loans.
They'll sell you thousands of greens. Veronese green and emerald green and cadmium green and any sort of green you like; but that particular green, never.
Commercial banks are very good for certain businesses, like loans and guarding other people's money. They're not great investors or entrepreneurs.
Under Bill Clinton's HUD Secretary Andrew Cuomo, Community Reinvestment Act regulators gave banks higher ratings for home loans made in 'credit-deprived' areas. Banks were effectively rewarded for throwing out sound underwriting standards and writing loans to those who were at high risk of defaulting.
When you say "bank," a bank is a building, a set of computers and chairs and things. The bankers are the people running these banks. They're the chief officers, and they push the loans because they don't care if they go bad. For one thing, they may package these bad loans and sell them off to gullible institutional investors.
For 'tis green, green, green, where the ruined towers are gray, And it's green, green, green, all the happy night and day; Green of leaf and green of sod, green of ivy on the wall, And the blessed Irish shamrock with the fairest green of all.
If there were not derivatives, there would be no bank loans at all today, because people want to get fixed-rate 30-year loans, but banks don't want to keep 30-year loans on their books.
If I'm a bank, and I'm making risky loans, I have an incentive, if I can, to make those loans using other people's money: in other words, to make highly leveraged loans.
Normally, banks record profits on loans only as they are repaid, whether they securitize the loans or hold them on their books.
Green leaves on a dead tree is our epitaph-green leaves, dear reader, on a dead tree.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
Making loans accessible to millions of the previously unbankable customers is a noble goal. Getting them hooked to such loans isn't.
And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I'm able to keep hundreds of thousands of dollars in additional income that I don't need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they've got a couple thousand dollars less in grants or student loans.
For the forest to be green, each tree must be green.
Our focus is more on secured retail business like housing and car loans. While we will do some unsecured loans - credit cards and personal loans - we will do it primarily with existing customers.