does a bank usually sell all its mortgages to investors or does it keep a percentage of the mortgages?

3 Comments

• LucaPacioli1492 says:

  January 12, 2009 at 3:22 am

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  It depends on the bank. Local community banks tend to keep almost all of their mortgages because they regard them as part of their relationships with their borrowers/depositors/customers.

  More national banks that draw in deposits from a larger area and make loans broadly tend to take their “cut” and pass the loans on to the public as repackaged tranches. This will be less the case in the future than it was in the past since the quality of the passed-on “packages” turned out to be less known than was thought.
• Scott K says:

  January 14, 2009 at 9:23 am

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  Most banks sell most of their mortgages. They keep the less risky the longest, but usually they even sell those. Some banks like Chase, tend to keep them forever. I don’t know the percents or anything, but here’s an example. I financed through US Bank like 10 years ago, they sold it to another mortgage co. after about 5 years, they sold it almost right away, and then Chase bought it from them and have had it for the past few years.
• nationw1de says:

  January 16, 2009 at 12:02 am

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  Mortgages are a commodity and are bought and sold on wall street. Typically loans that are high quality with good credit and low loan to property ratios are sold to Fannie Mae and Freddie Mac. Your bank may service the loan (process payments) but they certainly don’t own it.