| ▲ | chollida1 6 hours ago |
| To be fair to banks this is what they do with almost all debt their underwrite. They hold it to help stabilize the market for it while its being sold and then offload it once the market has been established. Nothing out of hte ordinary here, but to be fair the original article isnt' a financial site so they would have no real idea about how this work behind the scenes. This doesn't seem like a story at all given how robust this debt is trading. |
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| ▲ | thayne an hour ago | parent | next [-] |
| I think the real story isn't that the banks are selling it, but that they are apparently struggling to find buyers. |
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| ▲ | CodeWriter23 4 hours ago | parent | prev | next [-] |
| Banks don't want to own anything. They want to get their share and pass on the risk. |
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| ▲ | sm-silversight 33 minutes ago | parent | prev | next [-] |
| Is there any way other than a bloomberg to watch the trading action on it? |
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| ▲ | dayyan 6 hours ago | parent | prev | next [-] |
| My mortgage has been sold almost a half dozen times already. |
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| ▲ | alexpotato 5 hours ago | parent | next [-] | | My favorite was the following: - I still have a mortgage on a property but don't live there so the mortgage bill gets sent to a different address (b/c rental property) - Company A originated the mortgage and sells it to Company B - Company B completely ignores the mailing address and starts sending bills to the original property address - only through blind luck did I realize that the mortgage bill was being unpaid This seems like basic, basic bookkeeping but I guess it's also a reminder that "reality has more detail than people realize" and that there are plenty of opportunities for improving systems. | | |
| ▲ | motbus3 2 hours ago | parent | next [-] | | Ar some point I had all the bills on my calendar and a event to check if the company confirmed the payment. It saved me at least a handful of times.
I confess that I am not that diligent anymore, but I also have scheduled things in a more reliable way that always notifies me on payment. But the other day the bank skipped one of the payments because some information on the destiny account have changed but nothing was shown.
It is always annoying to stop what you are doing to do this | |
| ▲ | dreamcompiler 4 hours ago | parent | prev | next [-] | | One of those myths too many programmers believe: All street addresses can accept US mail. Not necessarily the issue in this comment, but when somebody gives you both a shipping address and a mailing address and you send mail to the shipping address, the fault is yours if it doesn't arrive. | |
| ▲ | mulmen 3 hours ago | parent | prev [-] | | I own the duplex I live in. The actual property address is the rental unit. Every time the mortgage gets sold my tenant gets mail about it until I can change the mailing address back to my actual address (next door). It’s absolutely infuriating because the carelessness of my mortgage servicer who I don’t even choose makes me look bad. | | |
| ▲ | btilly 3 hours ago | parent [-] | | You should be able to go to the USPS and do a change of address for yourself. That way every time mail for you is sent to your tenant, it will go to you. https://moversguide.usps.com/mgo/move-combined-mobile will let you do it online. It's a pain that you have to do this because of their incompetence. But it will save you the embarrassment. | | |
| ▲ | Spooky23 44 minutes ago | parent | next [-] | | It may be harder to do that now. One of the changes USPS made in recent years is that they are securing mail forwarding. That type of arrangement may not be possible. | |
| ▲ | alexpotato 3 hours ago | parent | prev | next [-] | | This is actually a great idea. | |
| ▲ | iririririr 3 hours ago | parent | prev [-] | | go to the *private company the usps sold the captive market to. |
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| ▲ | mikepurvis 6 hours ago | parent | prev | next [-] | | Is there a way that you can track this yourself? I've had three different mortgages [1] in my lifetime and as far as I know it was all completely opaque who/what was ultimately holding the underlying debt. [1]: First was a decade ago with RMG (a Canadian monoline lender) and the other two with Scotia, the first of which was a fixed mortgage at purchase, and the second was a refinancing. | | |
| ▲ | AnimalMuppet 6 hours ago | parent | next [-] | | When your mortgage is sold, you should get a "goodbye letter" from whoever sold it, and a "hello letter" from whoever bought it. This is so you don't keep sending checks to the old place, and have the new people decide that you aren't paying your mortgage. | | |
| ▲ | moritzwarhier 6 hours ago | parent | next [-] | | Composition vs inheritance maybe makes a difference here? :thinking_grimace: What I mean is parent companies and contracts that might obfuscate who's owed the debt. However, I don't know anything about debt markets let alone homeownership. | |
| ▲ | dnautics 4 hours ago | parent | prev | next [-] | | in principle you should be able to reject the mortgage sale, too. purely hypothetical but: suppose some bank was responsible for killing a family member, you shouldn't be forced to owe that bank money. This means that any mortgage transfer would come with a 'sweetener deal'. If you don't object to the transfer you get a small reduction in your monthlies, e.g. | | |
| ▲ | jongjong 3 hours ago | parent [-] | | I assume the right to sell the mortgage to anyone they want is part of the original mortgage contract. | | |
| ▲ | dnautics 36 minutes ago | parent [-] | | Yeah I don't know why I wrote "in principle". I meant "ideally" | | |
| ▲ | jongjong 30 minutes ago | parent [-] | | Understood, but they've got all the leverage, unfortunately. In countries like Australia, it's essentially impossible to get a fixed rate mortgage (for the life of the mortgage), when it would probably has been a great deal a few years ago; banks have all the leverage to dictate the terms. With variable-rate mortgages, banks can insulate themselves from inflation risks, which they themselves create. |
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| ▲ | cyclopeanutopia 3 hours ago | parent | prev [-] | | Checks? ;) |
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| ▲ | pc86 6 hours ago | parent | prev [-] | | I don't mean this flippantly, but it's usually whoever you're writing the check to. My first home had the mortgage sold within a week, and someone else started taking the money out of my account. | | |
| ▲ | gruez 6 hours ago | parent | next [-] | | The servicing company could be different than whoever actually owns the debt. | | |
| ▲ | whaleofatw2022 6 hours ago | parent [-] | | Yep. Some originators will hold on to servicing of your debt wherever it goes (within certain boundaries, e.x. if you go into a delinquency or reconciled delinquency state). Those originators use it as a selling point, because many people have gotten bit by servicer flips one way or another. |
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| ▲ | mikepurvis 6 hours ago | parent | prev [-] | | Oh okay, in that case mine were never sold. As in the sibling reply, my assumption is that the "retail" side of the mortgage (who you make your payments to) is fully detached from who ends up owning the mortgage backed securities that your debt is being financed by. |
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| ▲ | thayne 39 minutes ago | parent | prev | next [-] | | At one point my mortgage was sold to a bank with a truly awful website. One of its many faults was the password had to be exactly 8 characters. | | | |
| ▲ | HeyLaughingBoy 4 hours ago | parent | prev | next [-] | | I remember getting a mortgage and the loan officer saying that there was a 100% possibility that the loan would be sold within 60 days of closing. | | |
| ▲ | spiralpolitik 3 hours ago | parent | next [-] | | This is standard. Origination and servicing are typically handled by different companies (or parts of the same company). Usually the Origination side only handles short term loans and doesn’t want stuff hanging around longer than is necessary. | |
| ▲ | mpyne 4 hours ago | parent | prev [-] | | My mortgage got sold before the first payment. It was in retrospect quite funny because I still get periodic spam emails from the originator as if I'd already be back on the market for another mortgage. |
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| ▲ | hdgvhicv 6 hours ago | parent | prev | next [-] | | After being chopped up and bundled with safe loans being mixed with non safe loans so nobody has any idea what’s being bought. Where have I heard this before. | | | |
| ▲ | chollida1 6 hours ago | parent | prev [-] | | > My mortgage has been sold almost a half dozen times already. Sure that could be true, but that has nothing to do with the public debt we're talking about. Completely different markets. That's like me saying the condo Market in Miami is hot and you rebutting that single family homes in HOA's in Phoenix are not hot right now. Both can be true at the same time as they are completely different market that are only very tangentially relate. |
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| ▲ | topspin 6 hours ago | parent | prev | next [-] |
| > This doesn't seem like a story at all given how robust this debt is trading. That directly contradicts specific points made in the story, about specific Tier 1 banks and specific amounts of debt not finding buyers. And the amount cited isn't all that great, given the overall equity in play. > Nothing out of hte[sic] ordinary here Matthew Moniot, Man Group: "the deal sizes involved are 'out of scale to anything we've thought about, ever.'" Hard to compare your model with his, since he doesn't have one. When quotes from named credit risk guys from named finance organizations sound like angsty Gen Z, it's not ordinary. In any case, the story is covering something significant. There is an important test occurring, and we're all going to learn the results, sooner or later. It could all turn out fine, but I don't know. I don't believe you really know either. |
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| ▲ | chollida1 5 hours ago | parent [-] | | Well I'd agree the size of these deals are far larger than any debt deals I can remember in the past 10 years. But that has nothing to do with the scare tactic headline that says banks are trying tot offload debt. As I said this is exactly how banks work and how they treat all debt they underwrite. | | |
| ▲ | ares623 2 hours ago | parent [-] | | I believe the implication is that if AI is really The Second Coming (or First Coming, if you prefer), then banks would want to keep the debt and the potential gains of said debt. Or rather, there should be an overwhelming demand for said debt. | | |
| ▲ | Spooky23 40 minutes ago | parent [-] | | Bond guys aren’t emotional. Inflation is heading up as are rates. They’re unloading stuff from their balance sheet that will depreciate in value. It’s not necessarily a statement about AI, it’s just finance and accounting. |
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| ▲ | zer00eyz 5 hours ago | parent | prev | next [-] |
| > This doesn't seem like a story at all given how robust this debt is trading. FTA: That is exactly why CoreWeave-leased paper prices at 7.00% to 9.875%, against the 5.70% to 7.875% that hyperscaler-leased bonds command, per bond market data compiled by CCIR. Just so were clear: Core weave paid Micron and NVIDA 80 percent margins to buy equipment at a 9 percent lending rate so it can sell it to providers who are subsidizing tokens at 20x their own API prices (that are likely also subsidized). Could it all work out? It could. But it does not look like there is the financing to keep building - thats going to impact prices and the moment that happens this debt looks even more risky. |
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| ▲ | cowlevel an hour ago | parent [-] | | What you've written is the demand for debt. What's the supply like? You can't conclude demand exceeds supply without knowing both sides, and the US has printed more money than any other time in history. | | |
| ▲ | zer00eyz 16 minutes ago | parent [-] | | The debt (bonds basically) is sitting on the books of investment banks. The article here is 5 days old - that "9 percent" figure is already out of date. Here is today: Shares of AI cloud provider CoreWeave (CRWV) dropped over 15% Wednesday, a day after venture capitalist Chamath Palihapitiya posted on X a chart that showed the yield Nvidia-backed firm's 2032 bonds hit 15% yesterday as a sell-off brought prices into distressed territory. SOURCE: https://finance.yahoo.com/markets/stocks/articles/nvidia-bac... I can conclude that supply is far exceeding demand because of the rates attached. |
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| ▲ | charlieyu1 3 hours ago | parent | prev | next [-] |
| How would the banks make money then? I imagine the profit margin of debts is pretty small |
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| ▲ | onlyrealcuzzo 2 hours ago | parent | prev | next [-] |
| This just in: banks sell assets (data center loans) to raise capital so they can do bank things again (i.e. make more loans). Also just in: water is wet! |
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| ▲ | iririririr 3 hours ago | parent | prev | next [-] |
| yeah, but they dont underwrite such garbage! stop trying to normalize that oracle got away with shady deals with those banks. could you get 20mi on your 1mi house? yeah, oracle could, and much more. how on earth is this "normal" and "what banks do"? |
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| ▲ | Loquebantur 6 hours ago | parent | prev [-] |
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