To the moderators, so you decided not to delete it after all. Thanks to. Watch now as companies and banks in the red begin to collapse before your eyes.
Did you want to know why Bank of America is launching a $0 Down Payment Mortgage Program?
To understand this, you must first understand what is a Real-Estate Bubble, who creates it and why.
Imagine that you are a big investor and you are wondering how to invest your money in a venture that you cannot lose? Which is the best option?
I can answer you right away and you won't even understand my answer. The surest way is to create a commodity and sell it to yourself. You didn't get it, did you?
To understand it, imagine that you have $1 million. You invest $500K in Bank of America, and $500K in a builder who builds you a house. Then you, with a "magic wand", inflate real estate bubble, so your house now worth $1 million. There is a fool who has $200K saved and has decided that he can borrow $800K from the Bank of America, so to buy your house. The bank agrees to give him this loan. A question, what and to whom the bank gives this money after all?
Have you got it now? First, the bank returns to you the $500K you invested in it. Next the bank again give to you $200K from the idiot who took the loan, and question is, from where it give you the rest $300K? How from where, from the money of the other idiotic investors in the bank. In the end, you get your $1 million initially invested in Bank and builder money, but the good news is that the Bank of America still owes you the $500K you invested in it, even though it, de facto, is paying you this money back already. Let's put it another way. When the fool took out a loan, he/she can no longer service it, the Bank takes his/her house. But the bank owes you money that it can't pay you back, so it gives you the house back as compensation. In the end you have for sure $1 million and a free house that you can sell in the next real-estate bubble cycle. But the best news is that you can even get 2 free houses from the bank if their price drops enough to make them worth 250K each.
This is the simplest explanation of Real-Estate Bubbles, why they inflate, why they deflate and why the money of the banks is drained to have it failed and unable to repay its debts to certain investors.
Now you will already understand the answer to the above question. Bank of America start a $0 Down Payment Mortgage Program because in it there is still money to be drained by selling overpriced properties to it before the end of this time Real-Estate Bubble cycle.