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That's very recent, though. We had thirty year mortgages long before the government started holding most of the paper. Banks have been selling loans for ages
by gozur88 11y ago
That's very recent, though. We had thirty year mortgages long before the government started holding most of the paper.
Banks have been selling loans for ages - when I bought my first house in the '90s the bank which originated the loan sold it to a life insurance company four days after escrow closed. After a few years that insurance company sold it to someone else.
Life insurance is a good fit for mortgages. Insurance companies need a safe investment to pay out when people die, and usually the payout isn't inflation adjusted.
Besides, if you have to invest money for the long term but can't (by statute or temperament) handle much risk, what are you going to invest in? Twenty year T-Bills are at 2.30%.
- JumpCrisscross 11y ago> Twenty year T-Bills are at 2.30% FYI, T-bills have maturities of one year or less, T-notes two to ten years, and T-bonds 10 to 30 years. The term "Treasuries" helpfully covers all three.
- distances 11y agoSelling the loans forward sounds a bit weird system. In Finland it's usually the other way around -- customers may take their loans with them to another bank. This happens every now and then when competing banks offer better margins on the loans, or if customer isn't happy with the bank's service.