Economy Thread

[Crap Throwing Clavin]

4 minutes ago, Nouseforaname said:

I bought my house 18 months ago and I locked in 1.68% for five years at 25 year amortization.  
 

I had colleagues of mine who were refinancing and asking me if they should take fixed or floating at an obvious discount.  Their mindset was, even if rates go up, they won’t go up much.  Guess they were wrong. 

 

Morons.  You will never see sub-2% rates again, as long as you live.  Take it, lock it in.  That's a complete no-brainer.

[Nouseforaname]

2 minutes ago, Crap Throwing Clavin said:

 

Morons.  You will never see sub-2% rates again, as long as you live.  Take it, lock it in.  That's a complete no-brainer.

And with the extra cash, I’m paying down more as I’m allowed to put up to 20% of capital per year.  Normally I’d invest the cash but I’d be much more comfortable lowering my debt load.

 

When your parents are immigrants who had nothing, it’s a life lesson that teaches you to prepare for the worst.

[snafu]

25 minutes ago, Foxx said:

And gets all that interest? I'm not sure they hate that all that much.

 

I think banks get a better return on money they generate from originating loans rather than administering the loans (collecting payments, sending notices, setting interest rate changes for ARMs, running an escrow department).  In fact, most banks pay servicers, which cuts significantly into the interest they're earning.  And don't underestimate how much it boils bankers' blood every month that they collect a payment on a 3.0% mortgage these days when they could get 5.5%.

 

I'm sure they like a significant % of their overall portfolio to be long-term performing loans -- for auditors, for investors, etc., but they're not making big money off that long term interest.  They'd rather churn the loans though.  There's probably a 7 or 8 year "sweet spot".

 

 

18 minutes ago, Crap Throwing Clavin said:

 

Actually, the probably prefer it.  That predictability makes it easier to sell the mortgage and/or issue mortgage bonds on it.

 

I don't know if they package/sell loans that've been performing for 10-15 years or more.

They might get bond income, yes.

 

 

 

 

[Crap Throwing Clavin]

3 minutes ago, snafu said:

 

I don't know if they package/sell loans that've been performing for 10-15 years or more.

They might get bond income, yes.

 

 

 

 

 

They do if they want to originate more loans.  That's been the business model for years: issue a loan, sell the loan to get cash to issue another loan.  Maybe only credit unions hold on to mortgages nowadays.  

[Foxx]

2 minutes ago, Crap Throwing Clavin said:

 

They do if they want to originate more loans.  That's been the business model for years: issue a loan, sell the loan to get cash to issue another loan.  Maybe only credit unions hold on to mortgages nowadays.  

I had one mortgage that sold like five times in a two year period.

[Foxx]

21 minutes ago, Nouseforaname said:

And with the extra cash, I’m paying down more as I’m allowed to put up to 20% of capital per year.  Normally I’d invest the cash but I’d be much more comfortable lowering my debt load.

 

When your parents are immigrants who had nothing, it’s a life lesson that teaches you to prepare for the worst.

There is a great amount of comfort in knowing you're debt free (outside of the inevitable taxes). At least there is for me.

[Nouseforaname]

7 minutes ago, Foxx said:

There is a great amount of comfort in knowing you're debt free (outside of the inevitable taxes). At least there is for me.

Interest is not deductible for a residential loan in canuckistan

Edited October 7, 2022 by Nouseforaname

[snafu]

13 minutes ago, Crap Throwing Clavin said:

 

They do if they want to originate more loans.  That's been the business model for years: issue a loan, sell the loan to get cash to issue another loan.  Maybe only credit unions hold on to mortgages nowadays.  

 

Sure, but they are not likely to be selling "aged" loans.  They package and sell the new ones.

 

 

[Foxx]

8 minutes ago, Nouseforaname said:

Interest is not deductible for a residential loan in canuckistan

Well that completely sucks.

[Crap Throwing Clavin]

18 minutes ago, Foxx said:

I had one mortgage that sold like five times in a two year period.

 

Our first was through Wells (some 15 years ago, when they weren't horrific).  They don't sell loans to third parties, but issue bonds on the mortgages themselves to get cash.

 

Our refi, I think, was sold within two weeks of issuance.  Some online "Countrywide without the fraud" lender.  Usually wouldn't trust them myself...but since my wife does title work, and has a nose for real estate, title, and lending fraud, I just let her handle it.

[Nouseforaname]

8 minutes ago, Foxx said:

Well that completely sucks.

It really does.

[Foxx]

26 minutes ago, Crap Throwing Clavin said:

 

Our first was through Wells (some 15 years ago, when they weren't horrific).  They don't sell loans to third parties, but issue bonds on the mortgages themselves to get cash.

 

Our refi, I think, was sold within two weeks of issuance.  Some online "Countrywide without the fraud" lender.  Usually wouldn't trust them myself...but since my wife does title work, and has a nose for real estate, title, and lending fraud, I just let her handle it.

I think the loan originated at something like Greenpoint. Countrywide was one of the buyees at some point. They didn't hold it for long though, and sold it to someone else not long after acquiring it. 

[Ann]

Manufacturing is racist 

 

 

 

[Crap Throwing Clavin]

1 hour ago, Foxx said:

I think the loan originated at something like Greenpoint. Countrywide was one of the buyees at some point. They didn't hold it for long though, and sold it to someone else not long after acquiring it. 

 

That was Countrywide's business model - they never held anything.  

 

That, and fraud.

[Foxx]

7 hours ago, Nouseforaname said:

All is not doom and gloom at crédit suisse @Foxx

 

7 hours ago, Nouseforaname said:

They are proceeding with a bond buyback program to save on interest costs and solidify its balance sheet.

 

7 hours ago, Foxx said:

I thought I saw yesterday where they were considering selling assets to raise capital. Might have been for this reason(?). And.. at these prices, why the hell wouldn't you proceed to buy back your company that you sold at a much higher basis.

Seems their plans to sell their headquarters to a Korean investment firm, KB Securities, for €1.3bn, has fallen apart. Might be they don't buyback those bonds...

[Nouseforaname]

5 hours ago, Foxx said:

 

 

Seems their plans to sell their headquarters to a Korean investment firm, KB Securities, for €1.3bn, has fallen apart. Might be they don't buyback those bonds...

They have already announced the tender offer to buy back the debt and it’s expiring in November. I don’t think it was conditional to that deal .

[Nouseforaname]

The fed are no longer so unanimous about the continued benefit of interest rates increases.  

[Foxx]

Definitely not a recession.

 

Just don't call it a comeback.

 

[Nouseforaname]

50 minutes ago, Foxx said:

Definitely not a recession.

 

Just don't call it a comeback.

 

 

At the beginning of the week Kia sent me an email inviting me to a pre-sale for their new electric vehicle.  I tried to click on to the link and it was sold out in less than one hour.

 

Recession my ass.

[Foxx]

1 minute ago, Nouseforaname said:

 

At the beginning of the week Kia sent me an email inviting me to a pre-sale for their new electric vehicle.  I tried to click on to the link and it was sold out in less than one hour.

 

Recession my ass.

What... they sold all of two cars?