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Is the Eagle Rock Ranch housing development out on Baseline and Geronimo a finished product, or a spot of bare terra-firma with a bulldozer parked in the middle? If the houses are up and ready for occupancy then they are a "hard" asset and marketable. If they are currently just an architects wet dream, then the loans fall into a different asset class altogether ............... leverage ratio?
The banks used to hold $1 in cash for every $13 (approx) that they had in loans. This was ample funding unless a massive run was made on the institution in which case the bank would call a "holiday" and the FDIC would show up with enough cash to quell the storm. The leverage ceiling is now off the charts ............. You are good on the bonds, maybe....kinda sorta
The bank could cover with general issue bonds, but "securitizing" specific mortgages/loans is what Fannie, Freddie, and the "investment" banks do. Your neighborhood thrift does not enter into this practice.
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