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This 1 page Class Notes was uploaded by Anna Notetaker on Thursday October 6, 2016. The Class Notes belongs to Fin 4440 at Middle Tennessee State University taught by Phil A Seagraves in Fall 2016. Since its upload, it has received 10 views.
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Date Created: 10/06/16
Real Estate Finance – Toxic Assets Toxic Asset before known as the following: Mortgage Backed Security happens when individuals grab up thousands of mortgages from all around the country, put them all into the same category, and sell them off in pieces to investors à Big Pension funds bought them, insurance funded bought them as well as banks. Every month they sent in mortgage payments and each investor would get a monthly payment. Picking a toxic asset actually takes time because most individuals do not actually know their worth. The reason the group bought a toxic asset was the hope that it would be like a databank to the financial crisis. The podcast individuals gave an example of the toxic asset they bought: Originally cost $75,000 Paid $1,000 Contained mortgages on 2,000 homes in various locations Payments showed that they would double their money The podcast individuals travelled to multiple homes and talked to the individuals about their mortgages as well as their situation. They also showed the property on the spreadsheet in relations to the facts given by the property. All in all, Toxie survived. The reason of its survival was by investors and homeowners. Everyone learned that the housing is always unknown and for many investors, this is a frightening thing.
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