Say you lend $100,000 under a "creative financing" arrangement, with balloon payments and a steep interest rate rise after 24 months. Your poorly-paid mortgagee cannot pay and the house is foreclosed on, but in the real estate bubble, that property is now worht $180,000, so the lender pockets a nice profit off of the foreclosure and subsequent flip.

Ooh, yeah, that's a good point. I'd been keeping in mind that either the loan, or the house, winds up in the lenders hands. But i didn't think of foreclosures of houses that have significantly appreciated being a selling point.

Holy Christ, the rich make me sick.