GEO 3611 Lecture Notes - Lecture 19: Secondary Mortgage Market, Freddie Mac, Good Luck!!
27 Nov 2017
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The second exam is this thursday, 27th october! Same time, same place, same as last time. You would be paying back the bank an interest back then. The amount a bank could give out was restricted by the amount of capital it had. If the interest is low, and the bank gives it out at that low interest rate, it stays that way even if the interest rate raises. So, the banks try to make even more of a profit in other ways, mainly by selling loans off to pension firms and such. Co(cid:374)gress (cid:373)ade these thi(cid:374)gs (cid:272)alled (cid:862)go(cid:448)er(cid:374)(cid:373)e(cid:374)t- po(cid:374)sored e(cid:374)terprises(cid:863) (cid:894)g es(cid:895). He said he"ll talk a(cid:271)out this more in a bit. They are buying a stream of money waiting for another business to buy it so they can get a stream of money coming into their firm. (collateralized debt obligation, or cdo) They seem to buy and then sell to others when it comes to mortgages and investments.
