In other words When the $400k house goes to finance at a price of $200k and the consumer receives a 50% discount/debt jubilee making the final financial cost $100k. The banks only get $50k of the $100k jubilee total that they can immediately put in their pockets as income.

The banks will make lots of money even on 25% of total financing at compound interest and also by the increase in home buying. As ever increasing private indebtedness is the deepest problem in economics and private finance’s power is derived a good deal by their profitability, curbing such power helps reduce their oligarchic status.