If the banks repackaged and then sold home loans to investors, then why did the banks need to be bailed out? and Stockman Bank Construction, Miles City

If the banks repackaged and then sold home loans to investors, then why did the banks need to be bailed out?

Didn't the banks that sold the loans as investments already get their money back when they sold the loans?

And if a bank kept a loan, then the bank gets the house in a foreclosure, right? So, again in that case, if the bank gets the house, why does the bank need to be bailed out? Wasn't that the up- front agreement on the loan to begin with?


bank best answer:

Answer by smahadevan39
Bank is not only dealing in housing ( home )loans. They are various types of lending activities like business loan, industrial loan, infrastructure loans. loans to import and export etc. They take adequate securities. Bailing out the bank is a rare phenomena. In India, recently Kingfisher Air ways is in problem and so many Banks have lent in millions, they are hopeful of recovery.

bank

Stockman Bank Construction, Miles City


Image by dave_mcmt
The new Stockman Bank branch under construction at 800 South Haynes Avenue in Miles City, Montana. (August 2011)

---

Orignal From: If the banks repackaged and then sold home loans to investors, then why did the banks need to be bailed out? and Stockman Bank Construction, Miles City