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A 30-Year Trap: The Problem With America’s Weird Mortgages
(www.nytimes.com)
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this post was submitted on 19 Nov 2023
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Fta: "It’s a one-sided bet,” said John Y. Campbell, a Harvard economist who has argued that the 30-year mortgage contributes to inequality. “If inflation goes way up, the lenders lose and the borrowers win. Whereas if inflation goes down, the borrower just refinances.”
Yeah won't someone think of those poor lenders who make...let's check my notes....130% on their investment or more over the 30 years and it is amortized so you pay the most interest up front in the first decade? Even if you refi you still start that interest over and pay thousands in closing costs to the bank on top of it.
Waahhhhhh Cry me a fucking river.
Lmfao The reason rate are locked is obvious.
Why should I lose my home because interest rates changed and your mtg goes up 40%?
That's what happens with 5 -15 year loan terms.
A buddy in the UK is facing this now. Because he can't get a 30 year loan and can't pay off his house he's forced to restrcture and his payment is going from $800 to $1300.
Man look at all that inequality defeated just like the article says it would be...not.
And the lenders don’t lose at all! They borrow the money at current rates, and immediately package it off to a mortgage backed security and sell it within weeks of closing. The only potential “loser” is the investor that buys the security, but that’s just the nature of investing.
You say that, but we don't have to allow that kind of predatory shit to exist.
That's actually a mechanism to inject more liquidity to the market. And therefore allow more loans, for more people.
The opposite would mean rates would for sure increase because there would be very limited pool of capital to be loaned.
You say that as if we didn't have mortgages at reasonable rates back in the day before mortgage-backed securities were invented.
I didn't quite say that. I said it would be limited from now on.
Yeh this is just thinly veiled propaganda.
Came here to say the same thing. What a bullshit article.
Don't forget that your buddy has enjoyed years of super cheap mortgage unseen in the US.