>>>>Iceland's families own those banks, and have signed the command to the bankers to go into so many risky loans? Tsk, tsk... so how many generations will all Icelanders have to work to pay this off?
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>>>No, Iceland's families don't own these banks, it's more the other way around. Since most of the families have morgages in these banks, they would have to refinace their mortgages in a hurry. And with today's financial problems, and the reduced values of their homes, that would be close to impossible.
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>>Now let me get this straight... if you owe money to a bank in good standing, you are screwed unless you can pay. If you owe money to a screwup bank, you are screwed unless you can pay what you owe plus whatever the new owners imagine is your share?
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>>Seems like the legal system money can buy.
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>I am no lawyer, but as long as the bank holds the papers which shows who owns your house (is is called a deed?), you have a problem when the bank collapes.

Well if most of the Iceland is mortgaged unpaid houses, and there's too many of them suddenly on the market - reposessed, to be sold to the highest bidder so the claimants can redeem some value from them - they can't be sold. I can assume that there aren't any buyers full of money on Iceland; if there were, they wouldn't be taking mortgages so en masse, right? So, their houses are pretty much worthless. They can buy them off for pittance ;).