Eli5: Why do banks own houses?

Question

When and why did banks start owning houses and land? When did mortgages start?

In: 3

Answer 1

Banks don’t normally own residential real estate as an asset as it’s not very productive use of money. When you take a mortgage, you borrow money from a bank but you own the property. The only time a bank might find itself owning your property is if you default on your mortgage and they re-posses it , and even that for a short time as usually they’ll try to get rid of it quickly to recoup the money.