Here was a nice little article that discussed Where Does the Money Come From for Mortgage Loans?
which kind of explains what was stated earlier. 

http://www.realestateabc.com/loanguide/mortgage.htm
 

Goose wrote:

Brady Bunch wrote:

I'd say at least 20 years, if not slightly longer.

My first job in the business over 15 years ago was to review loan files after the "closing" of the loan to make sure everything was in order and if not, to fix what was wrong, so the loan could be bundled and sold to either a gigantic bank or Fannie/Freddie.

Obviously if you can pool tens of thousands of mortgages into one financial instrument it should theoretically be more secure and financially stable then a small or medium sized bank risking a local collapse of some sort.

It just makes more sense for smaller institutions to sell the loans and guarantee themselves some income rather than risk default of a high percentage of mortgages when they are working on small margins.

Another question (Sorry). Do the banks tell the home owner when the loan is sold?
I got my mortgage from a small local bank in Western Massachusetts. I still send the payments to the same address, so I figured that the local bank still owned the loan. Am I safe in that assumption, or do they keep this the same to make me feel good? And, should I as a homeowner care if the loan is sold? Does it change anything from my end?

If the bank "sells" your mortgage, they are required to notify you that it was sold.  When they sell it, they can still maintain the "servicing" of the loan (who you send payments to) or that can be sold as well.

For the borrower, it doesn't really matter unless you get a company that is servicing your loan with poor customer service. 

BYOB wrote:

Goose wrote:

BYOB wrote:

Does equity help you if you aren't going to sell your house? Isn't the only way to access the equity by basically re-borrowing the money or sell your house?

Sure, until you sell your house, or take out a home equity loan, that equity is an illiquid asset.
In times of housing market turmoil, your equity can be an asset that has more risk associated with it than does cash.
So, I wouldn't recomend that you consider your house (or anything else for that matter) to be a risk free investment, or to put money in it that you will absolutely need on a short time frame. But, historically, home ownership has been a good long term investment.
 

So, if you're not interested in selling your house because you bought it to live in, and you don't want to take out yet another loan re-borrowing what you already spent years paying in, home equity doesn't mean shit.

OK, you want to believe that home ownership is a bad deal, and nothing is going to convince you otherwise.
Home ownership is not for you.

So, if that is what you believe, then DON'T BUY A HOUSE, for god's sake already!
Nobody's got a gun to you head. Invest your money in other places and god bless you.

If you don't want to own a house that's up to you.
Just ignore the fact that a lot of ordinary people have gained lot of wealth and security by buying a home. You know better.

But please allow others the freedom to do something you don't want to do.

Seriously, why is it so important for you to trash home ownership?
I am doing it  and doing well. Sorry, I won't be climbing the walls of the banks and demanding blood.
Let me know how the revolution goes.

Demand the right to use someone else's money for thirty years for free and let me know how you make out with that.
Sheesh. .

Hey, equity is "shit".
Banks are greedy.
30 year loans are a rip off.
Nobody can afford anything other than a 30 year loan.

Then don't buy a home.
I got nothing else to offer you.

Hey, I'm not pissed.

Hey, equity is "shit".
Banks are greedy.
30 year loans are a rip off.
But, Nobody can afford anything other than a 30 year loan.

Then don't buy a home.
I got nothing else to offer you.