More on mortgages and finance...

...from Mark, yesterday:

First, on a serious note, about whether the bank can come after you for more than your mortgaged house is worth, Mark has this, about the US situation:

A mortgage for a house that’s worth less than the loan is “deficient”, and the lender may you be able to get a “deficiency judgement” to chase your other assets. Whether they can depends on the loan you signed and can also depend on the state you’re in, in the US. (Some states are “anti-deficiency”, others aren’t.)

A quote from http://calculatedrisk.blogspot.com/2007/12/1-trillion-in-mortgage-losses.html:

If the borrower walks away and mails in the keys (Fleckenstein's "jingle mail"), the lender is stuck with the collateral. However, if the California borrower refinanced, then the lender has recourse, and can pursue a judicial foreclosure (as opposed to a trustee's sale), and seek a deficiency judgment.

The lender can enforce that deficiency judgment by attaching other assets, or by garnishing the borrower's wages. Historically lenders rarely pursued (or enforced) deficiency judgments, but that could change if many middle class borrowers, with solid jobs and assets, resort to jingle mail.

I’ve also seen the jargon “recourse loan” in this context but I’m not sure if this is the same meaning as being able to seek a deficiency judgement.

I don’t know what applies in Australia…

Second, on a less serious note, "The Long Johns", on the sub-prime crisis: YouTube link here.
...And on the UK banking crisis: YouTube link here.