Banks have already been paid for mortgages

Since our economic commentators won’t ask this, I will.

If banks sell mortgages to investors, via the securitisation industry, how were they ever bust?

Pension funds, insurance companies, hedge funds, etc, buy mortgages and pay banks the principal, plus a premium up front as a lump-sum payment.

Therefore, the bank is paid in full, once, for the mortgage. The monthly payments of the homeowners are passed by the banks to the investors. Over the life of the mortgage, the investor earns more than they paid up-front to the banks, due to interest payments.

This is admitted — albeit grudgingly — by banks. They can no longer deny securitisation. But how do they explain being bust? They should be in extra credit, from the profit above the principal that the investor paid to them.

Are banks keeping shadow books? Is their securitised income declared for tax?

Where is that money?

How did the banks all arrive in Government Buildings in 2008, saying they needed to be bailed out overnight or the country would go bust, when their mortgages were all already paid in full? How can any bank in Ireland lay claim to the title of any house in Ireland if they have sold this right to others?

Henry Ford said: “it is well enough that people of the nation do not understand our banking and money system, for, if they did, I believe there would be a revolution.”

Barry Fitzgerald