12-06-2003 06:19									#1
	Creating money Support Apolyton, buy Civilization: The Boardgame

If I sell my house and hold the morgage, then sell the morgage for cash, didn't I just create money? I hold the cash, the buyer of the morgage holds the morgae in roughly the same amount, yet there is only one house...

Right?

	12-06-2003 06:35									#2
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sell the mortgage? it doesn't work that way... the mortage is simply a loan that you payback. You can't sell it, you would be giving someone money.

	12-06-2003 06:38									#3
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Wouldnt buying a mortage be like buying someone's debts? (people do do this)

	12-06-2003 06:38									#4
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"the mortage is simply a loan that you payback."

Not if I hold the mortgage.

	12-06-2003 06:40									#5
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GePap, true. If I hold a mortgage for $100,000, I might sell it to someone for $90,000 cash.

	12-06-2003 06:43									#6
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quote: Originally posted by Lancer "the mortage is simply a loan that you payback." Not if I hold the mortgage.

But it's debt... you owe your creditor money. It's not your's to sell. If the creditor decides to sell your mortgage, you just have a different entity to make your mortgage payments out to. Somehow, your logic train flew off the tracks.

	12-06-2003 06:45									#7
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quote: Originally posted by Lancer GePap, true. If I hold a mortgage for $100,000, I might sell it to someone for $90,000 cash.

You would still have to pay it back Lancer... if you did that, you'd lose 10 grand... not make 10 grand.

	12-06-2003 06:46									#8
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I'm the creditor. I hold the mortgage.

	12-06-2003 06:46									#9
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No he doesn;t. The other person bought the privalege of paying the bank back. I am still unclear why some folks buy the debts of others, but they do do it.

edit: woops.

Why would someone buy your mortage Lancer? how do they make money?

	12-06-2003 06:55									#10
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quote: Originally posted by Lancer I'm the creditor. I hold the mortgage.

a mortgage is a loan based upon the value of a house... it's debt that you pay back...

Nobody will buy debt... the "purchaser" of debt would give you $100,000 grand... then still have to pay $100,000 grand to the bank. Essentially, they are getting nothing... they end up paying $200,000.

	12-06-2003 06:57									#11
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quote: I am still unclear why some folks buy the debts of others, but they do do it.

It's a valid investment. The buyer of the debt pays off the remaining principle while the debtee just gives the money to the buyer. The buyer get's the money back with interest.

Lancer's idea doesn't make sense, hopefully he will realize where he made the mistake.

	12-06-2003 07:00									#12
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Great! A thread on forgery.

	12-06-2003 07:00									#13
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As much as it pains me to say it... Sava is right .

A mortgage is a debt to the bank. If you sell it, you may end up ahead in the end, because the buyer of your debt my charge a lower interest rate than the bank is charging (in order to get you to sell your mortgage to them and then pay the interest to them instead of to the bank), but that is the only way you will end up ahead.

The debt on the principal is still there, though.

	12-06-2003 07:02									#14
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quote: Originally posted by Imran Siddiqui As much as it pains me to say it... Sava is right .

bah, I'm right on more things than you'd like to admit

	12-06-2003 07:04									#15
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Not really .

	12-06-2003 07:05									#16
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AAAARRRGGGG!

A mortgage is NOT a debt to a bank. It CAN BE a debt to a bank, but doesn't have to be. A mortgage IS a debt to a creditor. In my example, I'm the creditor.

Are you guys screwing around or what? Someone please...

GET IT.

	12-06-2003 07:07									#17
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Stefu, if you happen this way, we need a ripping hair out smiley.

	12-06-2003 07:09									#18
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If you are the creditor, then why would you be able to sell the house? Wouldn't that be the creditee's?

	12-06-2003 07:09									#19
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quote: A mortgage IS a debt to a creditor. In my example, I'm the creditor.

So how in the HELL did you create money by selling it? You didn't create a dime! The guy paid you for the mortgage, and then mortgagee has to pay the guy. Where does this 'new' money come from?

	12-06-2003 07:12									#20
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quote: Originally posted by Imran Siddiqui So how in the HELL did you create money by selling it? You didn't create a dime! The guy paid you for the mortgage, and then mortgagee has to pay the guy. Where does this 'new' money come from?

I'm too frustrated to continue with this... Lancer doesn't get it.

	12-06-2003 07:13									#21
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If he sold a mortgage for $100,000 for the price of $100,000, then the mortgagee has to pay the guy he sold it to the $100,000. So instead of going from A -> B, it goes A -> C -> B. There is no creation here.

	12-06-2003 07:16									#22
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Well that's what I'm asking. There's one house worth $100,000. I sell it. The guy that buys it pays me a mortgage. I sell the mortgage to a third party. He pays me, but there's still a mortgage... He could turn around and sell it yet again. The new buyer of the mortgage could do the same. It could happen many times, each person walking away with whatever they sold the mortgage for, but still, there is only one house...

	12-06-2003 07:16									#23
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quote: Originally posted by Imran Siddiqui If he sold a mortgage for $100,000 for the price of $100,000, then the mortgagee has to pay the guy he sold it to the $100,000. So instead of going from A -> B, it goes A -> C -> B. There is no creation here.

I think the monkeys are slowly turning the wheel

	12-06-2003 07:18									#24
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quote: Originally posted by Lancer Well that's what I'm asking. There's one house worth $100,000. I sell it. The guy that buys it pays me a mortgage. I sell the mortgage to a third party. He pays me, but there's still a mortgage... He could turn around and sell it yet again. The new buyer of the mortgage could do the same. It could happen many times, each person walking away with whatever they sold the mortgage for, but still, there is only one house...

apparantly the wheels are spinning, but the train is going nowhere

	12-06-2003 07:22									#25
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I'm a tad peckish.

	12-06-2003 07:24									#26
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quote: Well that's what I'm asking. There's one house worth $100,000. I sell it. The guy that buys it pays me a mortgage. I sell the mortgage to a third party. He pays me, but there's still a mortgage... He could turn around and sell it yet again. The new buyer of the mortgage could do the same. It could happen many times, each person walking away with whatever they sold the mortgage for, but still, there is only one house...

What? How is this creating money? The $100,000 is just being paid from person to person... it isn't increasing or decreasing. You sell it to B, who sells it to C, who sells it to D... where is this extra money coming from?

	12-06-2003 07:26									#27
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Why, the buyer, of course.

	12-06-2003 07:26									#28
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If the guy buys the house outright (giving you $100,000), why is he paying you a mortgage? If he mortgages the house after he buys it, that just means you are giving him $100,000 and he's paying you back. If you sell that debt, the person buying it would pay you the remaining principle, plus, perhaps, a fee. But that fee wouldn't be larger than the amount of interest that would ultimately be paid. You wouldn't be creating an extra $100,000, your profit would be the added "fee".

	12-06-2003 07:29									#29
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How is the buyer getting any extra money? He pays you $100,000 for the mortgage, yeah? So he's -$100,000 now, right? So when the mortgagee pays the buyer, he is just getting his $100,000 back!

The only way the buyer is making money is on the interest of the mortgage. But that isn't creating money, because the mortgagee had to pay that anyway.

	12-06-2003 07:32									#30
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He's not buying it outright, he's paying me a mortgage. The next guy buys the mortgage outright...He puts the value of the house in my ready fingers, and now he holds the mortgage.

I'm thinking about going out for Chinese food and a beer.