How many payments will it take to pay off this loan?

My mom couldn't afford the mortgage.

Can you pay off your loans in a year?

So I pay the interest.

So they just kind of held fast and didn't sell their CDOs.

Well in the example I gave, I'm just Sal, I have no debt,

Every new college graduate thought they'd have a good job by now, a place of their own, and that they could start paying back some of their loans and build for the future.

My house is a mortgage free house.

She paid seven percent interest on the loan.

So on day zero, you have a 200,000 loan.

So in that situation, the bank works out pretty good.

And for the sake of simplicity, I'm going to assume that the loans in this presentation are interest only loans.

I've essentially become the lender to the home owner, and so the home owner's morgage payment will now come to me the Investment Bank .

I was a little behind in my loan payments.

liabilities.

I'd like to get a refund.

DBAA fee, nonrefundable.

You don't pay any mortgage payments.

The math is a little bit more difficult with that, so what we're going to do in this case is assume that I only pay the interest portion, and at the end of the loan I pay the whole loan amount.

I'll do kind of a more complicated one.

And let's say, I don't know, a year later I lose my job.

Then you make your second payment.

Now one thing I want you to keep in mind is, they get 10 only if every one of these borrowers pays their loans, never defaults, never pre pays.

Hanako made the final payment on her car, and felt very satisfied.

1 of 1 million is another 10,000 a year in property taxes.

So just like that, we were able to figure out our actual mortgage payment.

We have Loan C.

And then we're going to set p is equal to your monthly payment, your monthly mortgage payment.

I'd like to get a refund.

The mortgage payment, we calculated that before, using our mathematical knowledge of geometric series.

Some of which is interest, some of which is principle, but it's the same amount you're going to pay every month to pay down that loan plus interest.

There's 1,000 of me, and we are now going to pay the 10 .

But the total perceived value, let me write that down another

I'll pay you when I get back.

But in this circumstance, if I just look at my situation,

This is how you can actually solve for your actual mortgage payment.

So it's not just a promise to get money.

So now, all these people say, what am I doing?

And as soon as some of these people who had no jobs and got these 1 million loans, they probably couldn't even pay the mortgage on their loan, not to speak of continuing it, or even pay the low rate on the original teaser loan.

Rick Mm hmm.

Hey, Lone Ranger.

Did you get the loan?

We'll get to be cosier cos I'm not gonna be able to pay my mortgage on my house.

This right here is the debt, or essentially the principal payment on your mortgage, or how much do you owe to the bank.

These CDOs were already an issue.