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0 pointscascom3y ago0 comments

Except no bank (at least in the us) will cut that deal, because they don’t mark those loans to market.

0 comments

Yeah, that was my reaction too. But ... why not? It still seems possible. I mean, between banks they definitely have to mark it to market in order to sell the mortgage, so they would take a big hit to sell when interest rates go up.

So, why can't you put on a funny hat and glasses, get a new mortgage at the higher rate, and then go buy your existing one at a discount?

cascomOP3y ago

If you’re “trading” the mortgage, you mark to market, but if you hold it for investment then you don’t (this is driven by bank capital requirements - if I need to go raise capital every time interest rates went up that would create huge problems (despite the credit staying the same (if not improving))

Gareth3213y ago

The person is describing a bond loan. They're not offered in most countries.

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SilasX3y ago

So, why can't you put on a funny hat and glasses, get a new mortgage at the higher rate, and then go buy your existing one at a discount?

cascomOP3y ago

Gareth3213y ago

The person is describing a bond loan. They're not offered in most countries.

j / k navigate · click thread line to collapse