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post #1 of 5 Old 06-02-2003, 8:12 PM Thread Starter
 
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Re: Home Loans

This was a refi on my house so I'm no stranger to this practice but DAY-AM!!!
I haven't even made my first payment yet and I've just been informed that my loan has been sold to GMAC. In fact Union Planters just sent me the payment book with 12 envelopes yesterday! And today it's meaningless.

That's got to be the fastest this has ever happened (To me anyway).

Ride Red
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post #2 of 5 Old 06-02-2003, 8:34 PM
 
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Re: Home Loans

Freaking weird industry. Our was sold just about that fast. Now the thing that I chuckle about must is that the note is not carried by nonother than the one that sold it off orginally! Circle-jerk? Sheet. Just as long as they don't lose our paper.

I'm sure there is someone on the list that can explain what the deal is with all this loan selling.

- DH
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post #3 of 5 Old 06-02-2003, 9:06 PM
 
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Re: Home Loans

If they lose your note then they can't prove you owe them anything
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post #4 of 5 Old 06-02-2003, 9:10 PM Thread Starter
 
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Re: Home Loans

I can kinda' explain it. The 'bank, loan broker, investor, whoever' has a fund of money. They invest in home loans till the money is gone. So now they're holding paper worth a
:caca:load of money ($400,000 worth 900,00 over 30 years). Then they sell the loans to a 'bank, loan broker, investor, whoever' at a profit. The 'bank, loan broker, investor, whoever' buys it at a profit because they don't have to do the legwork on the loan. And they are putting it into another fund, long term or whatever. So now you have more money than you started with and it starts all over again. Of course they don't wait to run out of money, it's a revolving door program.

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post #5 of 5 Old 06-03-2003, 8:55 AM
 
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Re: Home Loans

The way home loans work now-a-days is that the big banks never do any loan initiations. They leave that up to other banks that specialize in qualifying new loans and title work but dont have the financial resources to back many home loans. These specialized banks use large bonds to generate 1-5 million blocks of loans, then they sell these 'blocks' off to the larger banks for a percentage of the loans. This way, the larger banks dont have to be bogged down with the details of qualification or title/legal work. They just service the loans over time. This is the way most of them do it now. I just refinanced my home and my loan will be handed off to a bigger bank in 90 days. Every lender I worked with while shopping for a loan has the same scheme.
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