You're assuming a lot here. It's more that people move or need cash so they have to refi. I don't think you understand the average consumer in the US. Rates won't stay this high forever. They'll be back in the 4/5 range shortly and people won't blink at ditching 3.5% to take 4.75% bc they need $50k for a new kitchen and to pay off some cc's. You're really getting our of your lane on this one.
Yes, I literally said that on page 1 on one of my first posts on the subject. IDK if that is "shady" like others are claiming comparing them to SBF
if rates came down, this wouldn't have happened to SVB. they needed those MBSs to not be so far under water and long term in the current environment. that's why they took a $3.5B loss on them. they didn't see things changing on them soon.
That's fine. That's really not relevant to the idea of people keeping mortgages for 30 years though. Maybe the average length goes from 7 to 9/10 years but lol at it ever getting to "most people are holding onto that 30 year fixed at 2.75% for all 30 years." That's really all I cared to point out.
I'm a loan officer so that was something we got in training at some point. I said earlier that was a few years ago. Here's a recent article saying it's "under 10" but not a specific number. To be clear, they aren't paid off as in paid in full, they are just refi'd or someone moves. That specific mortgage lasts less than 10 years. https://www.rocketmortgage.com/lear...0-year mortgage gives,loan off in record time. Most people with this type of mortgage won’t keep the original loan for 30 years. In fact, the typical mortgage length, or average lifespan of a mortgage, is under 10 years. That’s not because these borrowers pay the loan off in record time
Here's another putting it at 8. https://www.sofi.com/learn/content/average-mortgage-term-length/ The average length of a mortgage is 30 years, but that’s not the amount of time that most borrowers will keep the loan. Homeowners only stay in a home for eight years on average, and many refinance their home loans.
haha I can see where the confusion came from. Yea just saying the average 30 year mortgage lasts 7-8 years before the person moves or refi's and that mortgage is over.
I don’t know what your reputation is in this town but you can bet after the stunt you pulled today I’ll be looking into it
short term liquidity i hear is coming anyways by way of an FDIC advanced dividend prior to liquidation. other outcome is a big bank buys them likely at a discount and provides that liquidity in the short term. bond holders are going to take losses first. question is how deep the discount would be.
Maybe those companies should have split up their single account into many so they were all insured deposits. Please make me CFO.
IDK why ppl are conflating the ones depositing money in the bank having their money secured with the investors running the bank being bailed out
Do you think all bank accounts balances above 250k should be guaranteed even if asset sales don't cover.
Potentially. Yes. Maybe not someone with hypothetically a billion in a checking account...but a portion. Yes. And I can also agree for bailouts on student loans and other things
how so, I think normal people should leverage the FDIC insurance rules to their advantage as much as people with 250k+ piles of cash is an outlier for "normals"
I didn’t expect to open this thread and find Lyrtch advocating 1920’s style laissez faire banking concepts, but here we are.
It's stupid to do it yourself vs just having an institution do it for you when they have the platform and everything fully set up.
i'm trying to see if our tech/finance bros have consistency in their beliefs on down. something Larry doesn't but some people decided defend. i'm talking like leveraging joint accts dbl'ing FDIC insurance to combine to 750k coverage just with one bank. that's a lot of cash. easy things that will encompass 99% of people
Sure, it'll cover 99% of ppl but isn't going to cover 99% of people that would like to get paid over the next month bc the bank their company had a checking account with was mismanaged. That's vastly out of control of 99.99% of all workers and such an extreme rare risk that I'd guess a lot of companies don't do it. This bank was stable 60 days ago.
we should add a rule that companies carry what, 30 days of payroll? on their books when they have >20 employees or 1mill in gross revenue?
I’m not sure we find out, in hindsight, it was stable. This seems to be a big failure on the part of banking regulators as well.
Interesting from some banking attorneys at my firm: Deposit accounts, to the extent not insured, will get certificates that will be the first priority in any liquidation, so they'll get paid their deposit before any regular creditors get paid. And everyone gets paid before shareholders. Also, they believe that a buyer is already in place.