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---//Ms. A borrows $160,000 from a local bank toward paying for her new $200,000 house. Mr. B tells Ms. A, The bank actually owns your

---//Ms. A borrows $160,000 from a local bank toward paying for her new $200,000 house. Mr. B tells Ms. A, The bank actually owns your house. Is Mr. B correct?

  • A. The answer depends on whether Ms. As loan contains acceleration and alienation clauses, and whether she has recorded her deed.
  • B. Yes, because the bank has more money at risk than Ms. A does.
  • C. No, because if Ms. A does not repay the loan the bank has to foreclose to get possession.
  • D. Yes, because the bank has considerable power over borrowers as a regulated financial institution chartered by an agency of the state or federal government.
  • E. No, because the bank neither gains value if local real estate prices increase nor loses value if local real estate prices decline.

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