^^^ In the chess of Chicago politics letting Smollett walk free with a smug look on his face in exchange for Foxx's career is like trading a pawn for a bishop. I'll take that trade any day and who knows, maybe the FBI will get him anyhow.
Quote:
Originally Posted by Investing In Chicago
Why can't the bank raise the loan? BECAUSE IT IS A CONTRACT. Your agreeing to borrow a specific amount of money over X amount of time, paying back both P&I.
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And to further this answer, if the question is "then why doesn't the bank just make the contract say they can do that in the first place", the answer is that free market competition prevents it. In other words, banks like to lend on real estate because it is very good collateral. It generally goes up in value over time, is durable, and is further underwritten by the fact that land doesn't depreciate at all over time. In other words you can leave a dirt lot for a century and it doesn't function any less as a lot than it did 100 years earlier.
So think about real estate loans compared to other loan types, credit cards, student loans, a loan on a mattress, car loans. They all have much higher interest rates and shorter terms because they are either harder to collect on, have less collateral, or are generally more risky. Cars lose value quickly, the only thing preventing you from not paying your credit card is your credit rating and the vague threat of a small claims suit. Student loans have lower rates than the others because they can never be discharged in bankruptcy (even RE loans can), but they still have higher rates than mortgages because there is no valuable collateral. So no consumer would ever agree to a bank loan where the bank can jack up the rate or charges or payment because all banks want a piece of a good mortgage. They are willing to give you fixed debt at long terms and low rates because they know if you stop paying there is something good for them to come get to repay what they are owed.