Déjà vu: Royal Bank of Scotland Group (RBS) buys 4,000 "cheap" mortgage loans at auction in...

Déjà vu: Royal Bank of Scotland Group (RBS) buys 4,000 "cheap" mortgage loans at auction in March for around half of the value of their unpaid principal. Why so cheap? Because the loans are "to U.S. borrowers who are having trouble paying them back," according to WSJ. To some, this undoubtedly seems like a case of an investment bank's short memory as RBS' ~£1BN in losses on sub-prime assets during the crisis ultimately precipitated its demise. Time will tell.

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Comments (4)
  • SoldHigh
    , contributor
    Comments (991) | Send Message
    Or maybe they ran the numbers and found a 1/2 price sale to be a good deal - I would hope they checked first <g>
    17 Apr 2013, 07:13 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1805) | Send Message
    Well, the RBS bankers paid themselves huge fat bonuses based on the fake profits they generated. When the mortgage holders stopped paying the BOE bailed them out and the RBS bankers all kept their jobs. Only the low level janitors got sacked. I'd say they perfectly remember what happened, that is exactly why they are doing it again. Again they will pay themselves huge bonuses and again they will get bailed out, without ever having to pay back one pound, dollar or euro.
    17 Apr 2013, 07:15 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (562) | Send Message
    Don't understand comparison to 2007. Back then, they levered up to own mortgages at 100 cents on the dollar on wildly overvalued and about to plummet property.


    Now they're better-capitalized and buying mortgages at half price on property that's already collapsed in value. They're also buying from a seller who's being forced to sell for non-economic reasons. Seems like RBS has a pretty fair margin of safety on the deal.


    Whether it works or not remains to be seen, but I doubt it will threaten the bank.
    17 Apr 2013, 08:02 PM Reply Like
  • justaminute
    , contributor
    Comments (1552) | Send Message
    I see 4,000 foreclosures becoming rental properties.
    17 Apr 2013, 10:57 PM Reply Like
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