The banks want liquid assets with the best case scenario for them is you defaulting on your property title with the life debt (mortgage), then they keep your money and your material asset as the bank owns your house until you pay for it. Its win, win for them.
If there was a risk of the house ending up in the sea and they gave a customer a mortgage, the customer could default on the loan and the bank would be unable to requisition the property because it would be gone. So now the bank would be out of pocket the cost of the loan that could not be repaid.
No bank would offer a mortgage if there was the potential for destruction to the material asset. Already here in Australia, many banks will not finance houses in natural flood plains due to these reports indicating a likelihood of material damage from nature.
UncleDoug 0 points 1.6 years ago
This is not necessarily true.
The banks want liquid assets with the best case scenario for them is you defaulting on your property title with the life debt (mortgage), then they keep your money and your material asset as the bank owns your house until you pay for it. Its win, win for them.
If there was a risk of the house ending up in the sea and they gave a customer a mortgage, the customer could default on the loan and the bank would be unable to requisition the property because it would be gone. So now the bank would be out of pocket the cost of the loan that could not be repaid.
No bank would offer a mortgage if there was the potential for destruction to the material asset. Already here in Australia, many banks will not finance houses in natural flood plains due to these reports indicating a likelihood of material damage from nature.