bundabergdevil
Member
But that's really hard.
Yeah, my neighbor Tim is kind of an a**hole.
Investment Thread
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Yeah, my neighbor Tim is kind of an a**hole.
No helmet laws in SC. I'm just saying.
Same with New Hamster. They do have a lot in common. It gives Live Free or Die new meaning.
YmoBeThere
Member
I never really understood mortgage servicing rights. Really what's the value there that is being bought and sold?
It frees up capital for the banks/lenders that were the originators to issue more loans. It gets the loan off their books for cash to lend out. Their profits are in the origination fees. It's a way to get an immediate payday and then outsource the minutiae (billing, mailing, etc) to a company that has scale. For the buyer they get cash flow and a few points of the interest for processing and taking the risk of default or prepayment. In the end it's a way to keep the money multiplier going like fractional banking.
YmoBeThere
Member
Yes. Just the servicing rights. I understand the initial sale of the loan. Then you end up with a new servicer. But then a couple years later I ended up with yet another servicer. I guess part of it is the likelihood of pre-payment versus default, etc.
Ha, be careful! Yeah, back in my ancient day, we'd give a quarter of a point of the loan (.25%) to some entity to "service" the loan, i.e. send bills, accept payment, etc. Rather astoundingly we had a home loan of ours sold for servicing to some horrific entity named CENLAR in New Jersey...I say horrible, because we were paying extra each month to shorten the duration of the loan, but after 4-5 months it was obvious they were not sending us updated statements, they just gave us a coupon book. When I asked them to show me our current balance, they had NO idea, so I had to get the state's banking and insurance commission to get us a correct statement every month...it's a jungle out there.
As you say, this can happen multiple times, you can end up with another servicer more than once...
Outsourcing the minutiae and funneling it to a massive company creates scale. It costs a lender X dollars to service a loan but some massive third party that's bundled a bunch loans it costs X-Y. Every few years the lender shops around for a cheaper provider.
and sometimes they choose a completely incompetent one!
Honestly they are looking for cheap not necessarily good. It seems there is always a race to the bottom.
the true sign of death is a coupon book....that's what CENLAR gave us...gotta make sure all extra money you pay goes to principal...
Yes but they also do digital now. There is a big marketer here that puts out books and brochures in hotel lobbies. It's still a big business but they now offer a digital versions. Same for Tanger Outlets - both physical and digital coupon books. The USPS also delivers coupon packets and coupon inserts every month. At least it helps fund them.
My grocery store now offers digital coupons. Somewhat of a pain because I have to log on to a computer in the grocery store with my "saver's card" and then search to see if there are any coupons for the items that I have bought.
CrazyNotCrazie
Member
Don't they have an app or something so you can do it on your phone? I agree that I prefer printed coupons but I'm a bit of a dinosaur.
There are two approaches to coupons - seeing them ahead of time so buying something (or more of something) since it is on sale. And then having it applied to anything you have chosen to buy. The first approach is more of what they are going for as it is motivating you to buy something you might not have already wanted. The second approach (which is what you mentioned) is just giving you a discount on something you might have been buying anyway.
There's a blast from the past. I can remember trying to fill up those S&H Green Stamp booklets to try to get a "free" toaster or some such household or useless contraption. If I remember correctly, you needed a LOT of filled booklets to get even the cheapest item available and I'm not sure I ever succeeded in getting anything. But they were ahead of their time in the customer loyalty program; a pre-curser to airline frequent flyer programs and other more up-to-date loyalty programs.
Somewhat interestingly, one of the heirs to the S&H Green Stamp fortune lives down the road from me. He has a very nice, 250 acre estate.
Good question, CNC. I'm sure there may be a phone app that would negate me having to search in the store for a relevant coupon. I'll ask at the "help desk" if such a phone app exists. I tend to be somewhat of a Luddite on these matters.
ClemmonsDevil
Member
Chortled