Posted on 04/10/2023 5:28:38 PM PDT by RomanSoldier19
The housing environment is so unaffordable that certain banks lost money for each mortgage they financed last year — the first time that's ever happened, according to the Mortgage Bankers Association.
In 2022, independent mortgage banks and mortgage subsidiaries of chartered banks banks lost an average $301 for every mortgage they financed, the MBA said in a recent report. That represents a 113% decrease from last year's average income of $2,339 per mortgage, and is the first time that banks posted negative profits for financing home loans since the MBA began recording profits in 2008.
That's largely due to the decrease in housing activity, MBA's vice president of industry analysis Marina Walsh said in a statement. Prospective buyers are holding back from the market as mortgage rates hover near a 20-year high and limited housing supply keeps home prices elevated.
(Excerpt) Read more at markets.businessinsider.com ...
Why are they losing money on a new mortgage?
Would this have anything to do with (a) big money printing by the govt leading people to invest in assets like real estate to avoid deflating away their wealth and consequent asset bubbles (b) the 10 million or so illegals living in the country and driving up housing demand in urban areas
I have a question and need help here. My daughter bought a house and got it mortgaged with the first nine years being fixed interest. She’s been in it for 4 years now. She just got a notice her mortgage was picked up by another bank and they are upping the interest on her loan. How is this not breach of contract?
I dont know why, or even if its true. Business Insider has become a lefty woke hell hole of idiots and NPCs.
I suspect they are allocating fixed costs to a fewer numbers of loans.
Overhead expenses. They have payroll and office space built up for a higher volume of mortgages than are being processed thanks to high interest rates slowing the number of home purchases.
Hard to have sympathy since they stopped giving people the slightest amount of interest on deposits.
Also hard to care since they can create money out of nothing via fracrional reserve lending, and for the past few years they, by law, only have to have 0% of deposits physically on hand. - Yeah so when you go to get your money out, they can’t cover anyones deposits.
Other banks or servicing companies sometimes do step in to take over the payment of an existing loan... but no they shouldn’t be able to adjust the rate if it is set for a fixed term.
Mortgage fraud. If they don’t back down, her damages might pay off the rest of the mortgage.
Utter nonsense. If they lost money on every mortgage they’d simply stop making mortgages.
Their overheads are too high. If they have 1000 people working in the mortgage department, and the number of mortgages drops suddenly and dramatically, they will lose money before they can lay off or redeploy the workers.
Just because it was in the news today. Someone posted the home of the Louisville mass shooter. It was $220k if I remember correctly.
I wouldn’t call it a dump but it certainly wasn’t anything fancy. That’s in a city in a part of the country which is know for low housing costs. If such a thing exists anymore.
OK. That makes sense.
They can increase the monthly payment if her homeowner’s insurance or taxes increase but they can’t change the interest rate.
If that's not the most incongruous headline ever written, it has to be in at least the top ... one.
“She just got a notice her mortgage was picked up by another bank and they are upping the interest on her loan.”
In the fine print it was actually and ARM.
There were some missed or late payments and the fine print states they can raise the rate.
The bank is defrauding her, but not to an extent that is worth getting a lawyer or to the extent that she should refinance.
Was the interest increased or the monthly payment that includes tax and insurance?
There may have been a clause in the contract that made it legal for the new loan owner to raise the rate. That would have made it more attractive to prospective buyers. In the end it’s always the homeowner that gets screwed.
It would be a better idea to spend a little money for an hour of a good lawyer’s time to examine the contract and the notice. And do it this week.
Personally I think they are not allowed to do that.
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