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In response to
"I was also trying to figure out how that worked too."
by
Dano
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Sort of.
Posted by
iSpam (aka spamlet)
Jul 12 '16, 20:20
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Your bank doesn't want to hold your mortgage for 30 years so they find someone that does. It used to be pension funds and stuff with long time horizons but it's mostly just normal investors now.
THe bank makes money by selling your mortgage for more than what they lent to you (I.e. at a lower rate) or by combining it into a security of a bunch of mortgages to get a better rating which also lowers the rate. That's basically what happened in tr Big Short.
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