Random thoughts that don't warrant a thread

[52-80 19290]

30 minutes ago, nnm said:

Good question. WaPo has an article explaining it but I don’t have a sub so can’t read it:  https://www.washingtonpost.com/news/wonk/wp/2015/07/16/how-railroads-highways-and-other-man-made-lines-racially-divide-americas-cities/

reddit says this.  …

Im surprised neither of them ascribed it to climate change

[NWBuck 8598]

36 minutes ago, nnm said:

Good question. WaPo has an article explaining it but I don’t have a sub so can’t read it:  https://www.washingtonpost.com/news/wonk/wp/2015/07/16/how-railroads-highways-and-other-man-made-lines-racially-divide-americas-cities/

Here's a "gift" link to that article: https://wapo.st/4ich2HH 

[Iceman 2820]

@UTPhil2006 but anyone else can answer too:

Our mortgage is 5 years old and has had 3 different banks, starting with Wells Fargo and progressively getting more obscure. We have never been even a day late on payments.  It is paid on autodraft the first of each month, Our credit scores are excellent. The third entity, Mr Cooper(WTF?) took the mortgage starting 1DEC24.

1) why does the mortgage keep getting traded around?

2) When these transactions are done from one institution to another, do they have to put some good loans in there to offset the riskier mortgages in the deal?

 

[Rimbo 26482]

5 minutes ago, Iceman said:

@UTPhil2006 but anyone else can answer too:

Our mortgage is 5 years old and has had 3 different banks, starting with Wells Fargo and progressively getting more obscure. We have never been even a day late on payments.  It is paid on autodraft the first of each month, Our credit scores are excellent. The third entity, Mr Cooper(WTF?) took the mortgage starting 1DEC24.

1) why does the mortgage keep getting traded around?

2) When these transactions are done from one institution to another, do they have to put some good loans in there to offset the riskier mortgages in the deal?

 

oh yeah, MrCooper currently has one of our mortgages... it was originally financed (refinanced?) by USAA FSB, who had it underwritten by Chase, who nearly immediately sold it to Dovenmuhle (sp?), who then sold it to Nationstar, which is now named MrCooper.

BUT, this was actually AFTER we refinanced. We originally financed though Washington Mutual, who then died and it became Chase. We didn't like Chase and rates went through the floor, thus the refinance... which, as I said, immediately went right back to Chase. Hahaha!

None of this matters to you except for when you read your free annual credit report and see the chain there.

Our current place was financed through Loan Depot, where we refinanced again through themselves at some stupidly low rate. People call us with offers:

"You wanna lower interest rate?"

"Can you beat 2.5% fixed on a 30 year loan?"

"Uhm. No. Ok you're good, never mind."

I get the feeling Loan Depot is stuck with us at that rate; nobody else wants it. 🤣

[UTPhil2006 3839]

43 minutes ago, Iceman said:

@UTPhil2006 but anyone else can answer too:

Our mortgage is 5 years old and has had 3 different banks, starting with Wells Fargo and progressively getting more obscure. We have never been even a day late on payments.  It is paid on autodraft the first of each month, Our credit scores are excellent. The third entity, Mr Cooper(WTF?) took the mortgage starting 1DEC24.

1) why does the mortgage keep getting traded around?

2) When these transactions are done from one institution to another, do they have to put some good loans in there to offset the riskier mortgages in the deal?

 

1) Mr Cooper likes servicing (I'm guessing you started with UWM, they purchase a lot of UWM loans) and are built for it vs the bigger lenders (UWM, Quicken, NewRez) just want to do the initial loan and package and sell them 

2) I don't have a data point on that but I would assume so. They are sold in large batches. Again with the bigger lenders they have more stringent standards vs the non QM lenders that do 1 year tax return deals, bank statement programs etc that come with higher rates. 

[Iceman 2820]

If we ever do meet in person, first beer is on me.  Thank you.

[52-80 19290]

8 hours ago, Iceman said:

@UTPhil2006 but anyone else can answer too:

Our mortgage is 5 years old and has had 3 different banks, starting with Wells Fargo and progressively getting more obscure. We have never been even a day late on payments.  It is paid on autodraft the first of each month, Our credit scores are excellent. The third entity, Mr Cooper(WTF?) took the mortgage starting 1DEC24.

1) why does the mortgage keep getting traded around?

2) When these transactions are done from one institution to another, do they have to put some good loans in there to offset the riskier mortgages in the deal?

 

1. Some investors want the investment return of a mortgage, but aren't structured or licensed to originate loans. So the loans become packaged in commoditized product and sold around to these people who are pension funds and endowments and insurance companies etc.  (See Mortgage Backed Securities or Collateralized Mortgage Obligation). Also different financial institutions are always looking to balance their risk profile or liquidity level, so this is just 1 type of debt asset they hold vs treasuries, junk bonds, corporate bonds, etc.

2. It's a financial product, so it gets packaged into whichever way the market demands it. Sometimes they mixed riskier debt with safer ones to reach an target risk profile. Often now they package like-debt together, because people seek it. Like people want a basket of mortgages from a certain geography because they have a mandate for that exposure, or that location has lower interest rate sensitivity due to local laws or whatever.

Can I get a beer too?

[52-80 19290]

The abstracted bottom line is theres a bigger demand out there for mortgage loans than just from the mortgage lenders, which creates competitive pressure resulting in lower rates for borrowers. Because conversely if nobody wanted to take the risk of holding real estate debt, nobody would want to give you a mortgage.

[DigglerontheHoof 21344]

I’m already sick of Christmas music.

[nnm 37084]

3 hours ago, DigglerontheHoof said:

I’m already sick of Christmas music.

Gotcha (cross posting from the lol thread).

 

[SquishMitten 10466]

19 hours ago, nnm said:

Good question. WaPo has an article explaining it but I don’t have a sub so can’t read it:  https://www.washingtonpost.com/news/wonk/wp/2015/07/16/how-railroads-highways-and-other-man-made-lines-racially-divide-americas-cities/

reddit says this.  It’s as good an explanation as any:

It has to do with how cities grow.

Many towns grew around the places the trains stopped. But because trains are noisy and dirty, town centers were placed a ways away from the tracks. The more desirable residential areas were even further, and the industrial areas and cheap housing were closer. The very least desirable area were on the other size of the tracks, with were closer to the train, far from the town center, and when the train came through, blocked from the rest of the town.

That still doesn't explain why the town centers were seemingly always placed to the west of the tracks

Edited 5 hours ago by SquishMitten

[SurlyGator 919]

Purely a guess, but prevailing winds being from west to east would have kept downtown upwind from smoke, cattle smells, etc.