Calculating the loss incurred by a mortgage lender

Reference no: EM13826518

Problem:

A mortgage lender offers a loan of £150,000 on a house worth £160,000. House prices fall by 10% and the borrower then defaults on the loan. If the legal and other costs of recovering the property are £10,000; what is the loss given this default?

Additional Information:

This question basically belongs to Finance and it discusses about calculating the loss incurred by a mortgage lender offering loan.

Reference no: EM13826518

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Calculating the loss incurred by a mortgage lender : A mortgage lender offers a loan of £150,000 on a house worth £160,000. House prices fall by 10% and the borrower then defaults on the loan. If the legal and other costs of recovering the property are £10,000; what is the loss given this default?

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