They pay $1100 up front to get $100/year
for 10 years. So they get a total of $2000
paid back at the end of the 10 years.
($1000 principle + $100/yr * 10 yr interest
payments). This is appealing to pension
funds or retirees bc they get a steady
stream of interest payments.
Why would the investor slash new shareholder pay $1,100 up front to only get $1,100 over time? I’m gonna assume you meant that they pay a lot less than that but that the investment bank that created the corporation still makes more than what they spent.
continued.. who made the extra layer and stimulated the purchases, are the ones who should be bailed out. Hmm.. do you have lessons on the bail out plans and the medical overhaul?
So.. the person in the red is the person who went to buy the house. He also purchases those stocks for his retirement, and he is the one who loses his job. Since he is losing at both ends, he kind of changes the easy money scene for those with their secure securities. Without those taking out the home loans and buying the stocks disappear from the market because they have no job. Ok.. thinking thoughts. I’ll go back to listening. I’m waiting to hear why in this framework the large companies
It makes 5m risk free, but it could have made much more with some risk in the long run (according to this model) if it would keep its loans. The irony is that if banks starts to behave this way the banks who operates more traditional (not sell their loans) would be stuck with all the downside if (when) the housing market tanks. So a bank has every incentive to get rid of housing loans and make short term profits and thus further increase the incentive to make rotten loans.
i think it is because they are getting cash (lots of it) every time they try this model…then they can replicate it again and gain more cash in one short period of time rather than over the course of 10 years even if it would have been more.
Who allowed the Banks to sell their right to the investment bankers? Who manipulated or changed the law/rules/ regulations? Unbelivable. Unlimted greed. super presentation.
Who( Entity) is in charge of the rules and regulation of the banks?
Who allowed the Banks to sell these right to the investment bankers?
Obviously there was a law or rules and regulations, who broke all these for their greed. Unbelievable.
thank you for your presentation, superb!
K110, if you are referring to the bank that 1st made your loan when you ask about the “small commercial bank”, by selling its loans it is deferring the risk to the purchaser of these loans. Remember in this vid and a previous one that the small commercial bank receives a fee for acquiring the loan (I think 5000 is used) it would receive 5M (5000X1000) on virtually no risk (which has all been deferred with the sale of the mortgages). Therefore the bank makes a basically risk-free 5m profit.
@tml337
They pay $1100 up front to get $100/year
for 10 years. So they get a total of $2000
paid back at the end of the 10 years.
($1000 principle + $100/yr * 10 yr interest
payments). This is appealing to pension
funds or retirees bc they get a steady
stream of interest payments.
Why would the investor slash new shareholder pay $1,100 up front to only get $1,100 over time? I’m gonna assume you meant that they pay a lot less than that but that the investment bank that created the corporation still makes more than what they spent.
@honolulutradewind
- GrammLeachBliley Act 1999
continued.. who made the extra layer and stimulated the purchases, are the ones who should be bailed out. Hmm.. do you have lessons on the bail out plans and the medical overhaul?
So.. the person in the red is the person who went to buy the house. He also purchases those stocks for his retirement, and he is the one who loses his job. Since he is losing at both ends, he kind of changes the easy money scene for those with their secure securities. Without those taking out the home loans and buying the stocks disappear from the market because they have no job. Ok.. thinking thoughts. I’ll go back to listening. I’m waiting to hear why in this framework the large companies
Since the investors are buying loans, its a type of bond.
So this “shares” are stock or bonds?
It makes 5m risk free, but it could have made much more with some risk in the long run (according to this model) if it would keep its loans. The irony is that if banks starts to behave this way the banks who operates more traditional (not sell their loans) would be stuck with all the downside if (when) the housing market tanks. So a bank has every incentive to get rid of housing loans and make short term profits and thus further increase the incentive to make rotten loans.
i think it is because they are getting cash (lots of it) every time they try this model…then they can replicate it again and gain more cash in one short period of time rather than over the course of 10 years even if it would have been more.
someone correct me if i am wrong.
Amazing!!
well done
Who allowed the Banks to sell their right to the investment bankers? Who manipulated or changed the law/rules/ regulations? Unbelivable. Unlimted greed. super presentation.
Who( Entity) is in charge of the rules and regulation of the banks?
Who allowed the Banks to sell these right to the investment bankers?
Obviously there was a law or rules and regulations, who broke all these for their greed. Unbelievable.
thank you for your presentation, superb!
superb presentation
Thanks so much for this series. I’ve been wondering what was at the bottom of this whole mess for a while now.
Great presentation — so helpful.
What is the Key disfavors by Having Your Mortgage
realmortgagepaid.blogspot. com
K110, if you are referring to the bank that 1st made your loan when you ask about the “small commercial bank”, by selling its loans it is deferring the risk to the purchaser of these loans. Remember in this vid and a previous one that the small commercial bank receives a fee for acquiring the loan (I think 5000 is used) it would receive 5M (5000X1000) on virtually no risk (which has all been deferred with the sale of the mortgages). Therefore the bank makes a basically risk-free 5m profit.
Why would the small commercial bank sell its loans when it would earn much more by keeping them and collect the payment stream from the borrowers?
yeah,your the man
god damn it, you need a show on CNBC, i swear to god
u know how to present very very well…….thnx again
A good mortgage is like a work of art.
mortgageartist. com
cool
i have a question!! when you buy get a loan for a house you actually paying only the interest? or the principle also?