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> Did they do the bank a huge favor by just selling the house and dissolving the mortgage? No, the bank borrowed for 15 years fixed as well so they were gettin
by prepend 3y ago
> Did they do the bank a huge favor by just selling the house and dissolving the mortgage?
No, the bank borrowed for 15 years fixed as well so they were getting their projected return on yesterday’s dollars. It’s not like they now have more money to invest better.
Banks effectively have infinite capital for mortgages and make pretty much the same margin whether rates are 2% or 30%.
- bryanlarsen 3y agoThe bank probably just bundled and sold on the mortgage. But somebody is holding the mortgage, and it is likely they borrowed for 15 years fixed. But when the brother paid off their mortgage, the previous holder can now use that money to buy back that 15 year fixed bond at a massive discount. That massive discount is the huge favour the brother did.