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Weeks
by Gary E. Andrews - 08/29/26 12:08 AM
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Max Ceddo
by Gary E. Andrews - 08/27/26 11:50 PM
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Tin Lung
by Gary E. Andrews - 08/27/26 04:12 PM
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Joined: Jul 2005
Posts: 12,082 Likes: 1
Top 10 Poster
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Top 10 Poster
Joined: Jul 2005
Posts: 12,082 Likes: 1 |
First of all, lenders make about a quarter to half a point when they do a loan...so, a $200,000 loan (let's use half) makes the lender about $1000...then they sell the loan to Freddie or Fannie in a huge block by bundling alot of loans together. THAT'S ALL THEY MAKE ON IT PEOPLE. But Herbie, isn't that because they are using other people's money? I mean isn't the reason that they only get quarter or half a point because that represents the difference between the interest they charge on the loan and the interest they pay their depositors? Or am I missing something? If I'm correct, making $1000 on a $200,000 loan using other people's money seems pretty good to me.... I admit I don't understand all this stuff.....
..NOW...If you can't sell that loan anymore and the client goes into foreclosure...AND you put the house on the market and CAN'T sell it...and then it's value drops (let's say it appraised for $250k, a nice clean 80% loan to value)...NOW it's only worth the $200k that he borrowed...The lender is eating the daily interest (THEY have cost of money too!) Let's say that's 40 per day. NOW the house stays on the market 8 months (that's at LEAST the time now) ...That is $9600...NOW add in attorney's fees, realtor fees and your own administration costs....that loan you tried to make 1000 on, your are now losing $15,000, ASSUMING YOU CAN SELL IT FOR $200,000! That's just ONE small house...Multiply that at least by 3 in CA ! ! AND...I used an 80% Loan to Value deal which is very conservative. ALot of deals were NO down or 5% down. Now add that loss in too ! !
Isn't that an argument for being more conservative on who you loan to? I know some loans are going to fail. But what I've been hearing is that a large number of these loans should never have been made. You work in this industry don't you? What's your take on that? Scott
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