FINA 475 Lecture Notes - Lecture 12: Origination Fee, Home Insurance, Prime Rate
27 Nov 2017
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The original lender is called the mortgage originator. The principal originators of residential mortgage loans are thrifts, commercial banks, and mortgage bankers. Mortgage originators may service the mortgages they originate for. When a mortgage originator intends to sell the mortgage, it will obtain a commitment from the potential investor (buyer) Two government-sponsored enterprises (gses) and several private companies buy mortgages. Pool the mortgages and sell them to investors. Mortgage is securitized if it is used as collateral for issuing a security. Selling a mortgage at a higher price than original cost. Mortgage originator may hold the mortgage in its investment portfolio. A conforming mortgage meets the underwriting standards established by these agencies for being in a pool of mortgages underlying a security that they guarantee. If the standards are not satisfied, the mortgage is called a nonconforming mortgage. Mortgages can be held as investments or securitized. Pti is ratio of monthly payments to monthly income.
