I was just reading an article from Market Insider and they say that lenders posted an average loss per mortgage last year. Can you folks enlighten me as to how that happens?
In: 16
Money in versus money out.
Money in: Mortgage lenders make money when they can issue lots of mortgages, because interest payments are highest on new mortgages.
Money out: Mortgage lenders have costs to pay employees to run their business.
Because they’re issuing fewer mortgages now (because it’s so expensive for people to buy houses), the lenders are pulling less money in. But they still have the same money going out. So they’re losing money on these mortgages because the money in isn’t a lot higher than the money out.
Latest Answers