[nsfyn55]

Wealthy Borrower: "Why can't I refi lower?"

Lender: "No, because your loan isn't secured by the government"

Wealthy Borrower: "I am just using logic here, you're telling me a riskier borrower with lower credit than me can refi?"

Lender: "If their loan is secured by the government, yes"

Wealthy Borrower: "I don't understand"

Lender: "Well at least we agree on something"

Are you really using logic? Seems like a dubious claim to me. Capitalism is a harsh mistress Mr.1%. Don't like it move to Denmark.

[yardie]

Just a nitpick, your mortgage isn't secured by the government. It's actually owned by the government, Fannie Mae. Your bank is just the middle man that services it. If your bank doesn't want to service it or the government don't think they are managing it correctly they will move it to another bank.

So I'm not surprised these banks don't want to touch jumbo loans right now. That debt is their risk. They can't wash their hands of it if it goes tits up.

[fatnoah]

>So I'm not surprised these banks don't want to touch jumbo loans right now. That debt is their risk. They can't wash their hands of it if it goes tits up.

I'm in the middle of a refi w/large national bank and my broker mentioned he's not really writing jumbos except for refis for current customers.

[oldsklgdfth]

> your mortgage isn't secured by the government. It's actually owned by the government, Fannie Mae.

I'm confused what type of mortgages does this apply to? Is a conventional 20% down mortgages owned by the government somehow?

[naveen99]

Fannie Mae repackages some of the mortgages and sells them back On the market also as credit risk transfers. https://www.fanniemae.com/portal/funding-the-market/credit-r...

[nsfyn55]

> It's actually owned by the government, Fannie Mae.

Oh my bad. So riddle me this. Does the government secure mortages it owns?

[jericho_jones]

But government backing is risk mitigation...

[SilasX]

But the lender dismissed the borrower (in the story) as "you're trying to use logic", which is at least as big a confusion (and inability reflect on the root of the disconnect).

[nsfyn55]

The borrower is sort of using logic, but because of his extreme level of entitlement he fails to understand his premises are flawed.

Low rates are a function of your total risk not your perceived status as a responsible borrower.

The lender is using logic(the refi equation was almost certainly devised and reviewed by a qualified actuary)

[nabnob]

Denmark is also a capitalist country. Social democracy (having a free market while also having nationalized healthcare and a strong social safety net) isn't the same thing as socialism (where the state is run by the proletariat and exists to eradicate the bourgeoisie). Right now, there isn't a single socialist government in the world.

[nsfyn55]

Right just like there are no capitalist nations in the world. Because no nation is a completely unregulated hellscape governed by pirate kings. Spare me the semantics.

[hpoe]

Well under that definition Socialism has never existed because there has never been a state run by the proletariat, although sometimes people masquerade under the banner of the proletariat to increase their own personal power, i.e. Stalin, Hitler, Mao, etc.