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Need responses for both
initial response Jennifer
5/15/2014 7:02:29 AM
Good day Professor and class,
According to the Credit InfoCenter.com, simply stated, mortgage lenders make more
money when they sell a mortgage because they make a commission on it. For example when
“a bank makes a "point" on a package of loans worth one million dollars they will make
$10,000 dollars (1% of $1,000,000), an immediate profit by selling them” (para.4). It is
beneficial for the bank because these are feed-up funds the bank can now loan to other
consumers and the banker continues to make a profit.
Through my research, I could not
find anything “bad” per se, about a lender selling a borrower’s loan. I personally believe it
would be difficult for a borrower to follow who has control of their mortgage especially if
their loan is sold many times. Other than that as long as the mortgage loan and/or contact was
followed, I do not see the bad side to a lender selling a mortgage. I believe if a lender can
make money on top of money, legally, then they are going to do it no matter what. If this
includes selling someone’s mortgage to turn a profit, so be it.
As stated by the Federal
Trade Commission (FTC), a reverse mortgage is only for individuals “62 years old or older,
who need money to finance a home improvement, pay off a current mortgage, supplement
retirement income or pay for healthcare expenses. A reverse mortgage allows mature adults to
convert part of the equity in their home to cash, without having to sell their home or pay
additional monthly bills” (FTC. para.1). This type of loan is called a reverse mortgage
because the way a borrower pays for this mortgage is reversed. With a reverse mortgage, the
lender makes payments to the borrower of the loan not the other way around.
For the
most part if an individual can afford this type of loan as a mature adult, as stated above, there
are many benefits to a reverse mortgage. However, the FTC states certain types of reverse
mortgages can be quite expensive and more so than a regular home mortgage. But as I stated
earlier if one can afford it, is a great way to get some extra cash (FTC, para.4).
ReferencesFederal Trade Commission, Consumer Information (2011, March). Reverse
Mortgages. Retrieved from http://www.consumer.ftc.gov/articles/0192-reverse-mortgagesThe
MortgageProfessor.com. (2009, June 30). Why Do Most Lenders Sell Their Mortgages?
Retrieved from http://www.mtgprofessor.com/A%20%20Type%20of%20Loan%20Provider/why_do_most_lenders_sell_their_mortgages.htmCredi
t InfoCenter.com. (2011, May 25). Why Do the Banks Keep Selling My Mortgage Loan?
Retrieved from http://www.creditinfocenter.com/mortgage/sellloans.shtmlHave a great day
all,Jenn
Sharon Tatum's
Discussion
Sharon
5/15/2014 5:46:51 AM
Good Day Professor and class,
1. Why does a mortgage lender sometimes sell a mortgage? How is this beneficial? How is
it bad? Explain your viewpoint.
Mortgage lenders sometimes sell a mortgage because they do not have a long term
funding. In addition, it is due to risk. It is beneficial because they may retain the servicing
under contract with the buyer, creates liquidity for the market and provides lower mortgage
rates. When borrowers retain these services, they will continue to deal with the firm that
loaned them the money. It is bad when the market takes a turn for the worst. (N.D., 2009).
2. Search the internet to find articles about mortgages about reverse mortgages.
What is a reverse mortgage? Is a reverse mortgage good or bad ? Why?
A reverse mortgage loan is offered to homeowners who are senior citizens 62 years and
older to help by taking their equity and turning it into cash. The lender makes payment to
the borrower rather than the borrower making payments to the lender. I believe it is a good
thing so long as you remain in your home and pay all property taxes and insurance. It cuts
out the monthly payments. This is beneficial to senior citizens who are struggling due to
the economy.
References
N.D. (2009 June). Why do most lenders sell their mortgages? The Mortgage Professor.
Retrieved from http://www.mtprofessor.com
N.D. (2014). What is a reverse mortgage? The National Reverse Mortgage Lenders
Association. Retrieved from http://www.reversemortgage.org/About.aspx
Sharon
Need responses for both
initial response Jennifer
5/15/2014 7:02:29 AM
Good day Professor and class,
According to the Credit InfoCenter.com, simply stated, mortgage lenders make more
money when they sell a mortgage because they make a commission on it. For example when
“a bank makes a "point" on a package of loans worth one million dollars they will make
$10,000 dollars (1% of $1,000,000), an immediate profit by selling them” (para.4). It is
beneficial for the bank because these are feed-up funds the bank can now loan to other
consumers and the banker continues to make a profit.
Through my research, I could not
find anything “bad” per se, about a lender selling a borrower’s loan. I personally believe it
would be difficult for a borrower to follow who has control of their mortgage especially if
their loan is sold many times. Other than that as long as the mortgage loan and/or contact was
followed, I do not see the bad side to a lender selling a mortgage. I believe if a lender can
make money on top of money, legally, then they are going to do it no matter what. If this
includes selling someone’s mortgage to turn a profit, so be it.
As stated by the Federal
Trade Commission (FTC), a reverse mortgage is only for individuals “62 years old or older,
who need money to finance a home improvement, pay off a current mortgage, supplement
retirement income or pay for healthcare expenses. A reverse mortgage allows mature adults to
convert part of the equity in their home to cash, without having to sell their home or pay
additional monthly bills” (FTC. para.1). This type of loan is called a reverse mortgage
because the way a borrower pays for this mortgage is reversed. With a reverse mortgage, the
lender makes payments to the borrower of the loan not the other way around.
For the
most part if an individual can afford this type of loan as a mature adult, as stated above, there
are many benefits to a reverse mortgage. However, the FTC states certain types of reverse
mortgages can be quite expensive and more so than a regular home mortgage. But as I stated
earlier if one can afford it, is a great way to get some extra cash (FTC, para.4).
ReferencesFederal Trade Commission, Consumer Information (2011, March). Reverse
Mortgages. Retrieved from http://www.consumer.ftc.gov/articles/0192-reverse-mortgagesThe
MortgageProfessor.com. (2009, June 30). Why Do Most Lenders Sell Their Mortgages?
Retrieved from http://www.mtgprofessor.com/A%20%20Type%20of%20Loan%20Provider/why_do_most_lenders_sell_their_mortgages.htmCredi
t InfoCenter.com. (2011, May 25). Why Do the Banks Keep Selling My Mortgage Loan?
Retrieved from http://www.creditinfocenter.com/mortgage/sellloans.shtmlHave a great day
all,Jenn
Sharon Tatum's
Discussion
Sharon
5/15/2014 5:46:51 AM
Good Day Professor and class,
1. Why does a mortgage lender sometimes sell a mortgage? How is this beneficial? How is
it bad? Explain your viewpoint.
Mortgage lenders sometimes sell a mortgage because they do not have a long term
funding. In addition, it is due to risk. It is beneficial because they may retain the servicing
under contract with the buyer, creates liquidity for the market and provides lower mortgage
rates. When borrowers retain these services, they will continue to deal with the firm that
loaned them the money. It is bad when the market takes a turn for the worst. (N.D., 2009).
2. Search the internet to find articles about mortgages about reverse mortgages.
What is a reverse mortgage? Is a reverse mortgage good or bad ? Why?
A reverse mortgage loan is offered to homeowners who are senior citizens 62 years and
older to help by taking their equity and turning it into cash. The lender makes payment to
the borrower rather than the borrower making payments to the lender. I believe it is a good
thing so long as you remain in your home and pay all property taxes and insurance. It cuts
out the monthly payments. This is beneficial to senior citizens who are struggling due to
the economy.
References
N.D. (2009 June). Why do most lenders sell their mortgages? The Mortgage Professor.
Retrieved from http://www.mtprofessor.com
N.D. (2014). What is a reverse mortgage? The National Reverse Mortgage Lenders
Association. Retrieved from http://www.reversemortgage.org/About.aspx
Sharon
Need responses for both
initial response Jennifer
5/15/2014 7:02:29 AM
Good day Professor and class,
According to the Credit InfoCenter.com, simply stated, mortgage lenders make more
money when they sell a mortgage because they make a commission on it. For example when
“a bank makes a "point" on a package of loans worth one million dollars they will make
$10,000 dollars (1% of $1,000,000), an immediate profit by selling them” (para.4). It is
beneficial for the bank because these are feed-up funds the bank can now loan to other
consumers and the banker continues to make a profit.
Through my research, I could not
find anything “bad” per se, about a lender selling a borrower’s loan. I personally believe it
would be difficult for a borrower to follow who has control of their mortgage especially if
their loan is sold many times. Other than that as long as the mortgage loan and/or contact was
followed, I do not see the bad side to a lender selling a mortgage. I believe if a lender can
make money on top of money, legally, then they are going to do it no matter what. If this
includes selling someone’s mortgage to turn a profit, so be it.
As stated by the Federal
Trade Commission (FTC), a reverse mortgage is only for individuals “62 years old or older,
who need money to finance a home improvement, pay off a current mortgage, supplement
retirement income or pay for healthcare expenses. A reverse mortgage allows mature adults to
convert part of the equity in their home to cash, without having to sell their home or pay
additional monthly bills” (FTC. para.1). This type of loan is called a reverse mortgage
because the way a borrower pays for this mortgage is reversed. With a reverse mortgage, the
lender makes payments to the borrower of the loan not the other way around.
For the
most part if an individual can afford this type of loan as a mature adult, as stated above, there
are many benefits to a reverse mortgage. However, the FTC states certain types of reverse
mortgages can be quite expensive and more so than a regular home mortgage. But as I stated
earlier if one can afford it, is a great way to get some extra cash (FTC, para.4).
ReferencesFederal Trade Commission, Consumer Information (2011, March). Reverse
Mortgages. Retrieved from http://www.consumer.ftc.gov/articles/0192-reverse-mortgagesThe
MortgageProfessor.com. (2009, June 30). Why Do Most Lenders Sell Their Mortgages?
Retrieved from http://www.mtgprofessor.com/A%20%20Type%20of%20Loan%20Provider/why_do_most_lenders_sell_their_mortgages.htmCredi
t InfoCenter.com. (2011, May 25). Why Do the Banks Keep Selling My Mortgage Loan?
Retrieved from http://www.creditinfocenter.com/mortgage/sellloans.shtmlHave a great day
all,Jenn
Sharon Tatum's
Discussion
Sharon
5/15/2014 5:46:51 AM
Good Day Professor and class,
1. Why does a mortgage lender sometimes sell a mortgage? How is this beneficial? How is
it bad? Explain your viewpoint.
Mortgage lenders sometimes sell a mortgage because they do not have a long term
funding. In addition, it is due to risk. It is beneficial because they may retain the servicing
under contract with the buyer, creates liquidity for the market and provides lower mortgage
rates. When borrowers retain these services, they will continue to deal with the firm that
loaned them the money. It is bad when the market takes a turn for the worst. (N.D., 2009).
2. Search the internet to find articles about mortgages about reverse mortgages.
What is a reverse mortgage? Is a reverse mortgage good or bad ? Why?
A reverse mortgage loan is offered to homeowners who are senior citizens 62 years and
older to help by taking their equity and turning it into cash. The lender makes payment to
the borrower rather than the borrower making payments to the lender. I believe it is a good
thing so long as you remain in your home and pay all property taxes and insurance. It cuts
out the monthly payments. This is beneficial to senior citizens who are struggling due to
the economy.
References
N.D. (2009 June). Why do most lenders sell their mortgages? The Mortgage Professor.
Retrieved from http://www.mtprofessor.com
N.D. (2014). What is a reverse mortgage? The National Reverse Mortgage Lenders
Association. Retrieved from http://www.reversemortgage.org/About.aspx
Sharon