Posts Tagged ‘mortgages’

Mortgages Part VIII - The Cause of the 2008 Crisis

Mortgages Part VIII – The Cause of the 2008 Crisis

By The Banker | Blog Posts, Wall Street

On the 2008 mortgage crisis, from my perspective Ok friends, are you ready?  I’m about to piss you off. Contrary to the dominant journalistic narrative of the 2008 Crisis – that greedy bankers and their Wall Street enablers tricked the poor and gullible into predatory loans on their homes which led to foreclosures and economic [&hellip

Mortgages Part VI - On Wall Street

Mortgages Part VI – On Wall Street

By The Banker | Blog Posts, Wall Street

How do mortgages make it to Wall Street anyway? None of the following is essential to understanding mortgages from a personal finance standpoint, I just thought the details of mortgage securitization and mortgage bond trading and structuring would be interesting for some people.     I sold mortgage bonds at Goldman for a few years [&hellip

Mortgages Part V - Good Debt? Dangerous Drug? Or Both?

Mortgages Part V – Good Debt? Dangerous Drug? Or Both?

By The Banker | Blog Posts, Personal Finance

Is mortgage debt good debt? A dangerous drug? Or both? All debt acts like a drug. Debt artificially changes your personal financial metabolism, accelerating personal consumption, and exaggerating investment losses and gains.  Like any pharmaceutical, debt can be life-saving.  Without debt, you might have to wait an additional 10 years before you’ve saved up enough [&hellip

On Mortgages Part IV - What are points?  Are they Good, Bad, or Indifferent?

On Mortgages Part IV – What are points? Are they Good, Bad, or Indifferent?

By The Banker | Blog Posts, Personal Finance

Mortgage banks will quote you a mortgage interest rate, with the option to pay more money upfront, in the form of ‘points,’ for a lower interest rate over the life of the loan. The quick answer to “good, bad or indifferent?“ Mostly bad, for most people. It’s possibly good or indifferent under very specific scenarios. [&hellip

Mortgages Part III - 15-year vs. 30-year Mortgages

Mortgages Part III – 15-year vs. 30-year Mortgages

By The Banker | Blog Posts, Personal Finance

Why are 15 year mortgages cheaper than 30 year mortgages? The answer has to do with the interest-rate curve.  Contrary to what some may believe, the economy does not have one interest rate, but rather an infinite number of market-based rates, and dozens of important benchmark rates that determine the cost of money to different [&hellip