Home › Forums › Financial Markets/Economics › We’re still sinking with the Titanic
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briansd1.
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February 18, 2012 at 11:56 AM #19519February 18, 2012 at 7:15 PM #738305
moneymaker
ParticipantIt’s a fact that banks make “a lot of money” initially on mortgage loans, by either selling them or raking in the interest payments. It’s also a fact that they have lost a lot of money in the last 7 tyears via foreclosure and property devaluation. Without being too far out there I am actually amazed that the banks are offering 20 year loans @ 3.75% with no points and such. If you think about it that is less than a point above the 10 year rate. Wow, think about it, do you really think they want to hold that loan over the next 20 years when interest rates are “guaranteed” to go up.
February 18, 2012 at 10:55 PM #738308CA renter
ParticipantMost of those low-rate loans are being sold to Fannie Mae and Freddie Mac — the taxpayers’ mortgage arm. The “private” market simply skims a portion of every transaction while working as the middle-men.
Personally, if taxpayers are the ones shouldering the burden, there should be no middle-men; the govt should make direct loans and charge whatever fees necessary to cover origination costs (and pay their employees an hourly wage, no commissions).
Again, this is another example of the corporate welfare given to the financial industry. How much extra money are consumers forced to pay just to get a conforming loan? Why do we have to pay the higher price (points/fees and/or higher rates) when the originators (and everyone in between) are totally unnessary? The financial industry buys the politicians so that we are forced to use their services.
Thanks for this post and link, Arraya.
February 25, 2012 at 10:44 PM #738699paramount
ParticipantSlightly off-topic, but would a Greek default trigger a tsunami of credit default swaps?
February 26, 2012 at 5:35 PM #738744Arraya
Participant[quote=paramount]Slightly off-topic, but would a Greek default trigger a tsunami of credit default swaps?[/quote]
Eh, greece is not that big, so, nothing another round of bailouts can’t fix!
February 26, 2012 at 7:41 PM #738751SD Realtor
ParticipantAgreed about Greece. I presume you have heard about the 2T fund that is being created for the future…
February 26, 2012 at 11:44 PM #738768paramount
Participant[quote=SD Realtor]Agreed about Greece. I presume you have heard about the 2T fund that is being created for the future…[/quote]
So by 2T fund is that code that just means more debt for Greece?
February 27, 2012 at 6:51 AM #738776SD Realtor
ParticipantIt is 2T that is being backstopped for Europe in general.
February 27, 2012 at 11:27 AM #738788briansd1
Guest[quote=CA renter]Most of those low-rate loans are being sold to Fannie Mae and Freddie Mac — the taxpayers’ mortgage arm. The “private” market simply skims a portion of every transaction while working as the middle-men.
Personally, if taxpayers are the ones shouldering the burden, there should be no middle-men; the govt should make direct loans and charge whatever fees necessary to cover origination costs (and pay their employees an hourly wage, no commissions).
Again, this is another example of the corporate welfare given to the financial industry. How much extra money are consumers forced to pay just to get a conforming loan? Why do we have to pay the higher price (points/fees and/or higher rates) when the originators (and everyone in between) are totally unnessary? The financial industry buys the politicians so that we are forced to use their services.
Thanks for this post and link, Arraya.[/quote]
I agree on this one CA renter.
The evidence is the student loan program. Direct lending saves students and the government money.
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