Khan’s kind of … Khan’s kind of mischaracterized the nature of the bank’s security interest.
In a Torrens system, the title to the house is registered in the name of the borrower. That is, the bank buys the house for you and has title placed in your name.
What the bank retains is a right to kick you out and sell the house if the debt isn’t paid according to the contract.
This isn’t the same as saying that the bank “owns” the house.
The borrower owns the house–subject to the bank’s mortgage interest.
The significant thing about student loans, though, is that they are for the most part not extinguished upon discharge from bankruptcy. That means that, unlike other debts, it continues to exist after a debtor’s gone all the way through a bankruptcy.
Since the main reason a creditor takes security is to avoid having to share in a bankruptcy distribution, the fact that the debt’s not extinguished at the end means student loan debt is almost as good to the lender as secured debt.
A student loan could, in theory, be secured, but generally speaking they are not.
If the bank wanted to secure the loan, they could take a security interest in any property (including after-acquired property) they wanted. That’d just be something for the debtor and lender to agree to amongst themselves.
@bernicedan … @bernicedan Technically, it’s your knowledge. That’s why you can’t erase student loan debt with a bankruptcy, since they can’t repossess your brain.
Excellent video – … Excellent video – I’m curious if your views have changed since your thought-provoking series a couple of years ago about the advantages of renting over buying. keep up the good work!
I know this is … I know this is totally unrelated… but I am just curious about how student loans work … if a house title secures a mortgage loan.. is there something that secures student loans.. and what is it?
Khan I know you … Khan I know you mean well, so I feel no regret asking you.
Could you give equal time in a video showing a person who has decided to pay cash for a house and take us from start to finish how he could save to do that. People feel daunted by such a prospect and I know it is not a daunting task.
Too much emphasis has been placed in this country into indebting Americans. No one has told them there is an actual option not to take out loans.
Always makes me … Always makes me sick.
Pretty much one of the biggest reasons why banks and fractional reserve exist.
Conjure money out of nothing, in exchange for possession of real resources, and hoping the client won’t be able to pay back.
(Mainly done through interest)
Long, and very outbranching story, but it’s despicable. Check the net for topics on that.
Fractional reserve banks = scum.
Interest = poison.
I am tax accountant … I am tax accountant and I hope people pay attention to the mortgage tax deduction portion of your video. People are often misled by brokers etc.
Introduction to mortgage loans
good music
good music
Khan’s kind of …
Khan’s kind of mischaracterized the nature of the bank’s security interest.
In a Torrens system, the title to the house is registered in the name of the borrower. That is, the bank buys the house for you and has title placed in your name.
What the bank retains is a right to kick you out and sell the house if the debt isn’t paid according to the contract.
This isn’t the same as saying that the bank “owns” the house.
The borrower owns the house–subject to the bank’s mortgage interest.
@bernicedan
The …
@bernicedan
The significant thing about student loans, though, is that they are for the most part not extinguished upon discharge from bankruptcy. That means that, unlike other debts, it continues to exist after a debtor’s gone all the way through a bankruptcy.
Since the main reason a creditor takes security is to avoid having to share in a bankruptcy distribution, the fact that the debt’s not extinguished at the end means student loan debt is almost as good to the lender as secured debt.
@bernicedan
A …
@bernicedan
A student loan could, in theory, be secured, but generally speaking they are not.
If the bank wanted to secure the loan, they could take a security interest in any property (including after-acquired property) they wanted. That’d just be something for the debtor and lender to agree to amongst themselves.
You said “Hey, I …
You said “Hey, I made a 2000 dollar payment and my equity only went up $410,000.”
You can also drop …
You can also drop to a lower bracket as a result of the deduction, so it can be more that you save, right?
@bernicedan …
@bernicedan Technically, it’s your knowledge. That’s why you can’t erase student loan debt with a bankruptcy, since they can’t repossess your brain.
What is the video …
What is the video called in which you actually show how to calculate the monthly payment
Excellent video – …
Excellent video – I’m curious if your views have changed since your thought-provoking series a couple of years ago about the advantages of renting over buying. keep up the good work!
I know this is …
I know this is totally unrelated… but I am just curious about how student loans work … if a house title secures a mortgage loan.. is there something that secures student loans.. and what is it?
Khan I know you …
Khan I know you mean well, so I feel no regret asking you.
Could you give equal time in a video showing a person who has decided to pay cash for a house and take us from start to finish how he could save to do that. People feel daunted by such a prospect and I know it is not a daunting task.
Too much emphasis has been placed in this country into indebting Americans. No one has told them there is an actual option not to take out loans.
Always makes me …
Always makes me sick.
Pretty much one of the biggest reasons why banks and fractional reserve exist.
Conjure money out of nothing, in exchange for possession of real resources, and hoping the client won’t be able to pay back.
(Mainly done through interest)
Long, and very outbranching story, but it’s despicable. Check the net for topics on that.
Fractional reserve banks = scum.
Interest = poison.
wonderful
wonderful
wonderful
wonderful
wonderful
wonderful
I am tax accountant …
I am tax accountant and I hope people pay attention to the mortgage tax deduction portion of your video. People are often misled by brokers etc.
Amazing!
Amazing!
I like
I like