economics/finance question about mortgage biz - Posted by Brad (CA)
Posted by Brad (CA) on July 08, 2003 at 16:52:03:
Ok, so I’m a loan officer for 6 weeks now, everything is dandy, building pipe-line. Then I realize, I know almost nothing about the inner workings of the finance market, and more specifically the mortgage market. So I hope this doesnt get too long and you can answer some of my questions.
1)Who are the players in the mortgage industry; not company names, but what are all the different entities involved?
2)How do lenders make their money? I thought it had something to do with yield spreads, but then I ended up confusing myself.
2a)What is the correlation between: a 30 Treasury Bond and a 30 fixed mortgage? An ARM and the LIBOR? etc etc for the different products.
3)What is percentage rate based on for these different products?
4)A-paper lenders have daily changes in rate, while sub-prime lenders change their rates less frequently, why?
I have a feeling all of these quesitons are inter-related and the answers to some will also be the answers to others as well.
Teach me please