forums

Off-Topic Mortgage backed securities

9

90scane

Sophomore
Premium
Joined
Dec 26, 2015
Messages
8,004
Does any work as a mortgage officer that sells/packages loans?

Asking as I’m very concerned about banks after finding out they have no line of sight on individual loans but rely on servicers. They don’t know anything about the asset or mortgagee. It is all arms length.
 
Advertisement
@SpikeUM - do you have any knowledge of how MBS works? I’m pretty blown away at how little the investors know about the properties and mortgagee.
 
90scane said:
@SpikeUM - do you have any knowledge of how MBS works? I’m pretty blown away at how little the investors know about the properties and mortgagee.
Click to expand...
I worked as an ops manager with option one back in the early 00s. I recall the contracts are all very similar. Banks shuffle bad bets. Premium clients are portfolioed to take as much money from them as they can. The service end is held harmless. The originating bank is who back then. And yes from what I have read line of sight is ugly.
 
fatnasty187 said:
I worked as an ops manager with option one back in the early 00s. I recall the contracts are all very similar. Banks shuffle bad bets. Premium clients are portfolioed to take as much money from them as they can. The service end is held harmless. The originating bank is who back then. And yes from what I have read line of sight is ugly.
Click to expand...
How are banks mitigating the risks of having no line of sight and servicers being held harmless? The servicers are the absolute worst I’ve ever seen. The DSCR loans are risky with some at 1.0 interest only for 5 years then full payments start. Id assume there are also some arms that are just as bad.
 
90scane said:
How are banks mitigating the risks of having no line of sight and servicers being held harmless? The servicers are the absolute worst I’ve ever seen. The DSCR loans are risky with some at 1.0 interest only for 5 years then full payments start. Id assume there are also some arms that are just as bad.
Click to expand...
Investor backed. The contract typically have performance guidelines etc. Servicers are a disaster and at times the worst experience. The originator cashes out or they sell the portfolio to the banks. It's based on multiple factors. The high risk portfolios will get bounced around period. It's fear of 1st payment default.

Even with that scenario investors are paid. It's been a long time since I even muttered about this. Lol seriously I'm probably forgetting some items. I have tons of connections in the industry. My former peer is the South East manager with loss mitigation.

If you would like shoot me a dm with the info you're looking for and I can definitely reach out .
 
fatnasty187 said:
Investor backed. The contract typically have performance guidelines etc. Servicers are a disaster and at times the worst experience. The originator cashes out or they sell the portfolio to the banks. It's based on multiple factors. The high risk portfolios will get bounced around period. It's fear of 1st payment default.

Even with that scenario investors are paid. It's been a long time since I even muttered about this. Lol seriously I'm probably forgetting some items. I have tons of connections in the industry. My former peer is the South East manager with loss mitigation.

If you would like shoot me a dm with the info you're looking for and I can definitely reach out .
Click to expand...

I was really just interested in understanding how more banks haven’t been caught off guard by this setup. To me it is crazy to see especially with how poorly servicers operate. I have a few portfolio loans and escrow is a nightmare. Then you have bad title work to boot. Thank you for the details.
 
Last edited:
Back
Top