Mortgage Sold 1 Month after Getting It?

[NY65912]

OK, I did a re-fi with Citibank which was approved in April. I got a letter yesterday telling me it was sold to Freddie Mac.

I know mortgages are sold back and forth but in a month's time?

What gives?

[red-beard]

Normal

[kaisen]

Citibank intended to resell it when the wrote it

[ratpiper71T]

When I used to work in a mortgage company-we would have the buying investors(banks) calling us to inquire about the loan BEFORE it had even closed!! We usually told them to go to hell, of course, for that reason.

[NY65912]

Explain to me how they make money.

I feel dirty and used.

Wait, I always feel that way.

[tharbert]

Happened to me one refinance ago... Within about 45 days, we received a new booklet of payment stubs from a second mortgage company.

We just refinanced in the fall with Old National, $200 closing costs and dropped out APR to 3.9. I asked them if they were going to sell it "like last time" and they said they wouldn't. The margin of profit is almost nonexistent at that APR.

[Rick Lee]

They're not making anything on the sale of one loan. It's packaged and then sold on the secondary market. Totally normal and you signed a disclosure at closing acknowledging this could happen. They usually tell you the percentage of likelihood that it will be sold.

[NY65912]

I don't really care that it was sold. I'm trying to figure out how they make money.

[kaisen]

Originally Posted by NY65912

I don't really care that it was sold. I'm trying to figure out how they make money.

Selling Mortgage Loans - Mortgage Banks, Depository Institutions

They make a small percentage right away, and have their money back to re-invest. In some cases, they also make money in initial closing costs.

[NY65912]

Sounds to me like this sort of thing could bring down an entire banking system/economy that would then require a gov't bail out using money the gov't did not have and needed to print

Thanks for the input.

[kaisen]

Because they're selling financial instruments? You understand that it happens ALL the time, in every possible way? And it happened for decades before the collapse

[Zeke]

I had one loan sold 3 times. A lot of the time a bank will sell the loan but continue to service it. That's one way to make good money with nothing invested. You don't even know who has the pink slip.

[mepstein]

That's why (almost) all mortgages use the same 35 page note. They can be bought and sold with the same terms. Has little to no effect on the mortgagee.

[Shaun @ Tru6]

Making money by pushing risk around. What a great basis for our new economy.

[doug_porsche]

Originally Posted by Shaun 84 Targa

Making money by pushing risk around. What a great basis for our new economy.

Sad but true

[304065]

Originally Posted by Shaun 84 Targa

Making money by pushing risk around. What a great basis for our new economy.

By "new" do you mean "going on since Renaissance Italy?"

[azasadny]

Our mortgage was sold several times in less than a year...

[biosurfer1]

I thought it was funny that Bank of America sold mine to Banc of America.

[red-beard]

Originally Posted by biosurfer1

I thought it was funny that Bank of America sold mine to Banc of America.

Spelling change or real sale?

[Shaun @ Tru6]

Originally Posted by 304065

By "new" do you mean "going on since Renaissance Italy?"

those agrarian and manufacturing economies that built our country were just passing fads, I have to agree.