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Old 06-04-2018, 08:59 AM
 
4,543 posts, read 11,549,619 times
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Quote:
Originally Posted by juggar View Post
Again, it’s not about the fact that $14 is “too much”.... it’s the principle of that fact that a lender making 82% of the loan back in interest would do such a thing. When you apply for a credit card, they don’t do this, and guess what? The credit reports all come from the same 3 companies so it’s not like home lenders have an excuse to be charging for them when literally no credit card company has ever done this.

I’ll be sure to update after I talk to the lender to hammer out the loan details. I will go with whatever works best, be it USDA, FHA or conventional. There is a first time for everything, and there can be surprises to those not experienced. I’m done renting, it’s time to move on.
As I already pointed out, assuming it is a secondary market mortgage, the lender is not the party that will receive the interest on the loan.

I would think you would be more hung up on paying things like the title insurance, appraisal, etc. You know, the expensive items.
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Old 06-04-2018, 09:06 AM
 
Location: East Coast
2,771 posts, read 1,574,518 times
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Quote:
Originally Posted by TimtheGuy View Post
As I already pointed out, assuming it is a secondary market mortgage, the lender is not the party that will receive the interest on the loan.

I would think you would be more hung up on paying things like the title insurance, appraisal, etc. You know, the expensive items.
How do you figure the lender will not receive the interest? The lender or its assignee will receive the interest as part of the repayment. That's how loans work. It's why they make loans.

The only reason that the secondary mortgage market exists is because there is something of value that the original lender can sell. Although the majority of loans do get sold on the secondary market, not all of them do. I was quite surprised that on my previous home mortgage, the original lender kept the loan for 13 years (after which time I had paid off the original mortgage when I sold the home). Other people's loans are sold several times a year. But the lender or the subsequent purchaser of the lender's asset that has a determined value will receive the interest. Who cares if the lender services the loan itself or sells it?
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Old 06-04-2018, 09:14 AM
 
4,543 posts, read 11,549,619 times
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Quote:
Originally Posted by chicagoliz View Post
How do you figure the lender will not receive the interest? The lender or its assignee will receive the interest as part of the repayment. That's how loans work. It's why they make loans.

The only reason that the secondary mortgage market exists is because there is something of value that the original lender can sell. Although the majority of loans do get sold on the secondary market, not all of them do. I was quite surprised that on my previous home mortgage, the original lender kept the loan for 13 years (after which time I had paid off the original mortgage when I sold the home). Other people's loans are sold several times a year. But the lender or the subsequent purchaser of the lender's asset that has a determined value will receive the interest. Who cares if the lender services the loan itself or sells it?
Let's say you take out a 30 year fixed rate conventional loan at Wells Fargo. Wells Fargo will sell the note to Fannie Mae or Freddie Mac. You will make your payments to Wells Fargo for the 30 years, BUT they are just a pass through (aka the Loan Servicer). They forward all the interest on to Freddie Mac. Wells will receive a whopping 0.25% for servicing the loan. Investors who buy Fannie/Freddie bonds will be the ones receiving the interest. That credit report fee though is born by Wells Fargo and either they or the borrower will be paying the credit report fee.
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Old 06-04-2018, 09:17 AM
 
10,271 posts, read 6,500,789 times
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Quote:
Originally Posted by chicagoliz View Post
Other people's loans are sold several times a year. But the lender or the subsequent purchaser of the lender's asset that has a determined value will receive the interest. Who cares if the lender services the loan itself or sells it?
A lot of people care. Some will only get a mortgage from someone who services the loan themselves and does not sell it off. Mine was sold to Wells Fargo and I'm very happy with them. They have a great online pay site. I would also hate for it to be sold to a bank that is not responsive or has no online site for easy access to tax and payment and escrow records. I would really hate for it to be sold to a bank that does not accept mortgage payments online. I love the ease of paying and having a record of it and the money leaving my checking account in a few day as opposed to mailing a check and being worried that it gets lost along the way.
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Old 06-04-2018, 09:19 AM
 
4,543 posts, read 11,549,619 times
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Quote:
Originally Posted by chicagoliz View Post
How do you figure the lender will not receive the interest? The lender or its assignee will receive the interest as part of the repayment. That's how loans work. It's why they make loans.

The only reason that the secondary mortgage market exists is because there is something of value that the original lender can sell. Although the majority of loans do get sold on the secondary market, not all of them do. I was quite surprised that on my previous home mortgage, the original lender kept the loan for 13 years (after which time I had paid off the original mortgage when I sold the home). Other people's loans are sold several times a year. But the lender or the subsequent purchaser of the lender's asset that has a determined value will receive the interest. Who cares if the lender services the loan itself or sells it?
Just because your original lender did not sell the servicing, does not mean they did not sell the note. If you have a 30 year fixed rate conforming conventional loan, it was most likely sold to Fannie or Freddie. Back then you would have had no idea that the note was sold. Now I believe borrowers are informed when Fannie or Freddie purchases the note. This came to be after all the "who owns my loan" debacle.
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Old 06-04-2018, 09:29 AM
 
356 posts, read 241,925 times
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Quote:
Originally Posted by MikeJaquish View Post
Some people should be renters for life, I believe, as they are not prepared to deal with financial market realities.
No lender "makes 82% back in interest." Their money is not free to them. Their costs of doing business in lending are additional to interest rates.
Shop APR, rather than interest rates, to learn the cost of borrowing.

The fees MUST be disclosed for transparency. They have always been around, but have not always been disclosed clearly.

Want to tilt at the windmills of making the fees go away?
Press for legislation to allow you to borrow at higher interest rates with all fees concealed.
Oh, thats interesting because they worked up some papers and that 82% figure was right there in black and white..... if you pay that loan for 30 years, they will make that amount. Be it them, or whomever the loan gets sold to.
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Old 06-04-2018, 09:42 AM
 
Location: East Coast
2,771 posts, read 1,574,518 times
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Quote:
Originally Posted by TimtheGuy View Post
Let's say you take out a 30 year fixed rate conventional loan at Wells Fargo. Wells Fargo will sell the note to Fannie Mae or Freddie Mac. You will make your payments to Wells Fargo for the 30 years, BUT they are just a pass through (aka the Loan Servicer). They forward all the interest on to Freddie Mac. Wells will receive a whopping 0.25% for servicing the loan. Investors who buy Fannie/Freddie bonds will be the ones receiving the interest. That credit report fee though is born by Wells Fargo and either they or the borrower will be paying the credit report fee.
Quote:
Originally Posted by LifeIsGood01 View Post
A lot of people care. Some will only get a mortgage from someone who services the loan themselves and does not sell it off. Mine was sold to Wells Fargo and I'm very happy with them. They have a great online pay site. I would also hate for it to be sold to a bank that is not responsive or has no online site for easy access to tax and payment and escrow records. I would really hate for it to be sold to a bank that does not accept mortgage payments online. I love the ease of paying and having a record of it and the money leaving my checking account in a few day as opposed to mailing a check and being worried that it gets lost along the way.
Quote:
Originally Posted by TimtheGuy View Post
Just because your original lender did not sell the servicing, does not mean they did not sell the note. If you have a 30 year fixed rate conforming conventional loan, it was most likely sold to Fannie or Freddie. Back then you would have had no idea that the note was sold. Now I believe borrowers are informed when Fannie or Freddie purchases the note. This came to be after all the "who owns my loan" debacle.
But, so what? Why do I care what is happening to the money I repay? Whoever owns the loan still has to abide by all of the terms of the mortgage. I'm still paying the same amount. What difference does it make to me what happens to the money once I give it to them? As long as I've received proper credit for paying it, it doesn't matter.

And almost all lenders and servicers have the ability to pay online at this point.
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Old 06-04-2018, 09:50 AM
 
4,543 posts, read 11,549,619 times
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Quote:
Originally Posted by chicagoliz View Post
But, so what? Why do I care what is happening to the money I repay? Whoever owns the loan still has to abide by all of the terms of the mortgage. I'm still paying the same amount. What difference does it make to me what happens to the money once I give it to them? As long as I've received proper credit for paying it, it doesn't matter.

And almost all lenders and servicers have the ability to pay online at this point.
If you recall, the point was that the Lender does not receive the interest.
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Old 06-04-2018, 09:55 AM
 
356 posts, read 241,925 times
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Quote:
Originally Posted by TimtheGuy View Post
As I already pointed out, assuming it is a secondary market mortgage, the lender is not the party that will receive the interest on the loan.

I would think you would be more hung up on paying things like the title insurance, appraisal, etc. You know, the expensive items.
I have ZERO issues paying for legitimate fees such as home inspection, pest inspection, etc....
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Old 06-04-2018, 10:12 AM
 
Location: East Coast
2,771 posts, read 1,574,518 times
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Quote:
Originally Posted by TimtheGuy View Post
If you recall, the point was that the Lender does not receive the interest.
But, technically, the lender *does* receive it. The receipt of that interest goes into the valuation of the mortgage note to sell it. The lender is either receiving it directly or passing it along based on the value of the expectation of receiving that money. The lender gets the financial value of the receipt of that interest, regardless of whether the right to collect it is sold to someone else.
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