Bankers giving the business (Full Version)

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woodsandfield -> Bankers giving the business (7/4/2008 11:21:05 AM)

Forgive me for not being a financial expert.
Okay, that out of the way; I still don't understand why banks loaned to deadbeats; doing the funny loans, ie no money down, loan full price of the house and downpayment.
I was once told by a banker that banks are in the business of collecting money not houses. There's no profit in houses for bankers, he said.
Sooo, they didn't see the record drop in house prices and no qualified buyers (?) coming????
This whole thing smells funny.
Okay, I understand why people would get the arms, they thought the market would go up, not down, and they could flip.
That is the part that is most criticized, yet the most understandable.
Maybe the investors bought with flipping in mind and got caught. Okay, I understand that too.
What I don't understand is bankers loaning to people when they knew the market would nosedive and the people would default.
If you know the answer, please let me know.



Miss Giggles -> RE: Bankers giving the business (7/4/2008 11:40:56 AM)

Because there was a lot of money to be made on selling mortgages. Each banker got a commission for each loan they sold. I worked briefly at a mortgage place so I can't explain the whole thing because its very complex but the bank and the mortgage banker got a nice commission for each one.

The bank then sells the loans in bulk on the secondary market.. that is where they make most of the money. (on the interest payments)

A lot of people did know that the market would collapse eventually, but the companies didn't care they wanted to make the money while they could.



woodsandfield -> RE: Bankers giving the business (7/4/2008 12:13:06 PM)

The banks make money on houses that are losing money sitting around empty for months... years... with no buyers in sight.
Yes, we all know, to a man, woman and child, that low life mortgage brokers and realtors, because of greed, shystered many home buyers.
The minorities and bankers all get bailed out with taxpayer dollars.
How can we avoid this again?

quote:

ORIGINAL: Miss Giggles

Because there was a lot of money to be made on selling mortgages. Each banker got a commission for each loan they sold. I worked briefly at a mortgage place so I can't explain the whole thing because its very complex but the bank and the mortgage banker got a nice commission for each one.

The bank then sells the loans in bulk on the secondary market.. that is where they make most of the money. (on the interest payments)

A lot of people did know that the market would collapse eventually, but the companies didn't care they wanted to make the money while they could.



relady -> RE: Bankers giving the business (7/5/2008 10:17:18 AM)

quote:

Yes, we all know, to a man, woman and child, that low life mortgage brokers and realtors, because of greed, shystered many home buyers.
We have had more than a few Realtors here in the St. Louis area who have lost their licenses and are doing some jail time for their part in mortgage fraud. Being an honest Realtor, I hate that some people are just so greedy. However, the majority of Realtors are completely innocent in this debacle. The more I find out about it, the more it needs to be laid right at the feet of the greedy banks who are out of control and think they are above the law.



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