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Comment by papercrane | Hacker News Reader

Loans are an asset on the banks balance sheet and can be sold like any other asset.

Why can't people sell the bank's debt to them?

They probably could, but who would “buy” a liability? If someone wanted to sell you their problems, how much money would you pay for the privilege of the burden?

> who would “buy” a liability?

This is literally what this thread is about, people's debt getting passed on from the bank to someone else

No, when people owe money to the bank, that's an asset on the bank's balance sheet. That's the opposite of a liability. Companies will purchase the bank's assets, because the bank's assets (which are your liability) are worth something.

It doesn't work the other way around: if your end of it is a liability (your loan/mortgage/whatever), nobody wants to buy that from you, because it's worth a negative amount of money, it's a burden, a liability. Companies want to purchase the other end of the deal, because it's what makes them money: it has a positive value.

They could try, but who would pay for it at a worthwhile price? The bank already defaulted. The loan has value and can be sold because the borrower is still solvent.

MSTR bought out it's own Silvergate loan when it collapsed.

So depending on the the loan, you might be able to buy it so you can pay it off at a discount.

Who says they can’t? I can’t find it just now, but I recall reading an article about some firm that approached a number of SVB depositors offering to buy the rights to their deposits at a discount (probably a steep discount at that). This was on or about that Friday or Saturday, before the government announced they would cover more than the FDIC limit.

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