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Mortgage-backed securities II

Posted: January 12th, 2010 | Author: admin | Filed under: Tips | Tags: , | 25 Comments »


Part II of the introduction to mortgage-backed securities

25 Comments on “Mortgage-backed securities II”

  1. 1 SuchisLifeIA said at 11:33 am on January 12th, 2010:

    continued.. who made the extra layer and stimulated the purchases, are the ones who should be bailed out. Hmm.. do you have lessons on the bail out plans and the medical overhaul?

  2. 2 SuchisLifeIA said at 11:41 am on January 12th, 2010:

    So.. the person in the red is the person who went to buy the house. He also purchases those stocks for his retirement, and he is the one who loses his job. Since he is losing at both ends, he kind of changes the easy money scene for those with their secure securities. Without those taking out the home loans and buying the stocks disappear from the market because they have no job. Ok.. thinking thoughts. I’ll go back to listening. I’m waiting to hear why in this framework the large companies

  3. 3 CBossyful said at 12:26 pm on January 12th, 2010:

    Since the investors are buying loans, its a type of bond.

  4. 4 TomekLeeChan said at 1:12 pm on January 12th, 2010:

    So this “shares” are stock or bonds?

  5. 5 Kikkan110 said at 2:03 pm on January 12th, 2010:

    It makes 5m risk free, but it could have made much more with some risk in the long run (according to this model) if it would keep its loans. The irony is that if banks starts to behave this way the banks who operates more traditional (not sell their loans) would be stuck with all the downside if (when) the housing market tanks. So a bank has every incentive to get rid of housing loans and make short term profits and thus further increase the incentive to make rotten loans.

  6. 6 catharthic said at 2:37 pm on January 12th, 2010:

    i think it is because they are getting cash (lots of it) every time they try this model…then they can replicate it again and gain more cash in one short period of time rather than over the course of 10 years even if it would have been more.

    someone correct me if i am wrong.

  7. 7 akshayswaroop said at 2:41 pm on January 12th, 2010:

    Amazing!!

  8. 8 guccianaa said at 3:02 pm on January 12th, 2010:

    well done

  9. 9 honolulutradewind said at 3:48 pm on January 12th, 2010:

    Who allowed the Banks to sell their right to the investment bankers? Who manipulated or changed the law/rules/ regulations? Unbelivable. Unlimted greed. super presentation.
    Who( Entity) is in charge of the rules and regulation of the banks?

  10. 10 honolulutradewind said at 4:16 pm on January 12th, 2010:

    Who allowed the Banks to sell these right to the investment bankers?
    Obviously there was a law or rules and regulations, who broke all these for their greed. Unbelievable.
    thank you for your presentation, superb!

  11. 11 bananaminge said at 5:15 pm on January 12th, 2010:

    superb presentation

  12. 12 kolomgorov said at 5:53 pm on January 12th, 2010:

    Thanks so much for this series. I’ve been wondering what was at the bottom of this whole mess for a while now.

  13. 13 MiriZemel said at 6:20 pm on January 12th, 2010:

    Great presentation — so helpful.

  14. 14 2fuck2shit2 said at 7:17 pm on January 12th, 2010:

    What is the Key disfavors by Having Your Mortgage

    realmortgagepaid.blogspot. com

  15. 15 DCady452 said at 7:54 pm on January 12th, 2010:

    K110, if you are referring to the bank that 1st made your loan when you ask about the “small commercial bank”, by selling its loans it is deferring the risk to the purchaser of these loans. Remember in this vid and a previous one that the small commercial bank receives a fee for acquiring the loan (I think 5000 is used) it would receive 5M (5000X1000) on virtually no risk (which has all been deferred with the sale of the mortgages). Therefore the bank makes a basically risk-free 5m profit.

  16. 16 Kikkan110 said at 8:45 pm on January 12th, 2010:

    Why would the small commercial bank sell its loans when it would earn much more by keeping them and collect the payment stream from the borrowers?

  17. 17 Lunatic4ever said at 8:48 pm on January 12th, 2010:

    yeah,your the man :D

  18. 18 ILoveGoodFellas said at 9:18 pm on January 12th, 2010:

    god damn it, you need a show on CNBC, i swear to god

  19. 19 pagalmadman1 said at 9:49 pm on January 12th, 2010:

    u know how to present very very well…….thnx again

  20. 20 MrMortgage1 said at 10:35 pm on January 12th, 2010:

    A good mortgage is like a work of art.
    mortgageartist. com

  21. 21 MrMortgage1 said at 11:04 pm on January 12th, 2010:

    cool

  22. 22 romish12 said at 11:57 pm on January 12th, 2010:

    i have a question!! when you buy get a loan for a house you actually paying only the interest? or the principle also?

  23. 23 nanassaki said at 12:33 am on January 13th, 2010:

    Thanks for updating the video, it’s very useful but i’m super headache with the picture

  24. 24 high5flyer said at 12:55 am on January 13th, 2010:

    The commercial bank (white) does this to be able to make a loan and get fees. However, once they make the loan they no longer have as much in their deposits to make more loans to others. The commercial banks gets that money back (principal) by selling the rights to the loans cash stream (monthly payments) to an Investment Bank (green). The investment bank then sells those same rights to individual investors (blue). They pocket in this example $100 million just for being an intermediary.

  25. 25 hakker2002 said at 1:20 am on January 13th, 2010:

    lol that is why we r in this financial crisis all thx to ABS, MBS, CDO and Credit difoult swaps CDS, do not learn this or i will be very conserned in US banking system in the future

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