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It's definitely an industry ripe for rebirth. Or simply for death. Not my idea, I first thought it was a joke when they told me, but it makes perfect sense. I
by narag 9y ago
It's definitely an industry ripe for rebirth.
Or simply for death. Not my idea, I first thought it was a joke when they told me, but it makes perfect sense. I get exactly zero interest for my savings, not even to compensate inflation. It's stock options or bs funds.
Only useful service I get is cards and avoiding keeping cash in a physical safe. Credit comes from cards or specialized loan companies.
There are two services that do matter: mortgages and credit lines for companies. I can see how this kind of volume operations could be also be done by specialized companies so generalistic banks could disappear.
- Klathmon 9y agoYou don't even get to choose your mortgage company. A few years ago a friend of mine bought a house and actually turned down a house who's sellers had a bank of America mortgage as he had bad experiences in the past. He went out of his way to choose not to deal with them, but to his suprise 30 days after he closed he got a letter in the mail telling him that his mortgage was sold to Bank of America! And not suprisingly he had the same issues.
- doodpants 9y agoIt's been almost exactly 2 years since I bought my condo, and I'm currently on my fourth mortgage company. Which is now Wells Fargo! I don't know why they keep selling my mortgage.
- henrikschroder 9y agoI have never purchased property in the US, but I keep reading horrible anecdote after horrible anecdote, so I have to ask: As a buyer, why would I even care who the seller has their mortgage with? Why would that matter? Where I'm from, the real estate agent deals with that shit. When you close the deal, the agent calls up the new bank or faxes them or whatever so that they open a mortgage for X amount for the piece of property for the buyer, and directs them to send Y to the old bank so that they close out the previous mortgage, and Z to the agent's account, who then takes their cut, and forwards the remainder to the seller. Is this not how it works in the US?
- dd36 9y agoNo. There are no loan assumptions in US. Seller’s mortgage holder is irrelevant.
- henrikschroder 9y agoOk. Good. :-) So why was Klathmon's friend bothered by it?
- tstrimple 9y agoBecause now his friend is forced to be a customer of Bank of America unless he goes through a refinancing process. Even then, unless he's very careful, he could end up refinancing with a company who turns right back around and sells the mortgage back to Bank of America. The same thing happened to me. I've had two mortgages through other banks who then sold my mortgage to Wells Fargo forcing me to have to deal with them and I had absolutely no say in it.
- deleted 9y ago[deleted]
- Klathmon 9y agoIn his case Bank of America attempted to forclose on a house he bought after he bought it.
- ensignavenger 9y agoI presume your friend had title insurance, and the title company dealt with it?
- Klathmon 9y agoOh I'm sure, I didn't follow it all that closely but I remember it being resolved within a few weeks, but the headache was apparently enough for him to want to avoid sellers with BofA in the future.
- dd36 9y ago*servicer. Fannie or Freddie probably own the note.
- ensignavenger 9y agoAs part of your disclosures, lenders that plan to sell your loan will usually be required to disclose this fact, so you can deal with a lender that keeps their loans in house. The last house I bought the company disclosed that they might sell the loan, but they remain the servicer on the loan, so I don't even know who owns it.
- Klathmon 9y agoSince then I've bought 2 houses, and both mortgage companies I've worked with had that clause. Is it actually possible to find someone who won't? Or is it just a false sense of choice like the ability to "choose an ISP that says they won't sell your information"?
- ensignavenger 9y agoSome small community banks maybe? Some banks keep at least a portion of their loans in house. In some cases they may still have that clause in case they decide to sell it later, even if they plan to keep it in house.
- dahdum 9y agoSome credit unions may keep the mortgage in-house, but afaik it's mostly private banks working with HNWIs that will do so 100%. Those mortgages are often very large or non-standard (like 100% financing interest only or a combo mortgage/heloc).
- matwood 9y agoIt is possible. Smaller banks and CUs will often keep mortgages. Suntrust for example, tends to keep their mortgages.
- coliveira 9y agoBanks don't do anything useful that cannot be provided by other means. They are completely useless. The only thing that banks do is to provide credit against things you already currently own, like mortgages and commercial loans. But these things could very easily be provided by an official agency. For example, if you don't pay your monthly mortgage you just lose the house and an official agency will deal with the sale of the property (maybe through third-party services). Same thing for commercial loans. There is no need to create a private, for-profit bureaucracy to handle this.
- yjftsjthsd-h 9y agoSo... Your alternative to banks is banks, but public sector, and you expect this to improve the bureaucracy level?
- coliveira 9y agoIt doesn't need to be the public sector directly. What I mean is that banks are not using their own money to do what they do, so it does't make sense to let them charge interest. There could just be a set of regulated institutions that charge fixed fees (independent of the amount of the operation) to perform these tasks, which basically consist of converting one form of wealth (real state or business assets) into monthly obligations.
- JetSpiegel 9y agoMore like reuse an existing bureaucracy instead of creating a parallel, private one.