So if that is the case.. who is on the hook WHEN the house sits.. UNSOLD, UNOCCUPIED, DETERIORATING INTO OBLIVIAN?
the investor...
fyi, Fannie and Freddie are some of the biggest players on the secondary mtg market. A lot of pension funds buy them as well.
It is done this way so that banks can free up more money to lend on more mortgages. Not all do it, though. Some lend it and just hold the mortgages and make the money back that way.
I had bought a house a number of years ago that had the mortgage sold before I even made the first payment on it. The original lender now had their money back so that they could originate a new mortgage plus all the money they had made on the various fees. The investor or the note purchaser got a supposedly sound investment that paid 7% interest or whatever rate I was paying back then.
There is also an ACORN game going on according to some unnamaed caller on talk radio. They have worked out some way to allow people to rent ‘vacant homes’ as I understand it [vague memory alert]. So ACORN people make sure the homes remain vacant [through a recent law as I understand it] until one of their buddies needs to rent some place cheap. I’m not sure how much rent the home owner-turned-land lord gets, if any.