Part II of the introduction to mortgage-backed securities
Duration : 0:9:34
Mortgage-backed securities II
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Part II of the introduction to mortgage-backed securities
Duration : 0:9:34
Technorati Tags: finance, Khan, MBS, mortgage-backed, security
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love your videos …
love your videos dude. I’m studying this kind of stuff but in Australia so some of it’s a bit different but most of its the same and your videos have been a great help, so thank you! Just wondering if you have any plans in the future to do a video on fixed vs. floating exchange rates? If so that would be just perfect
I dont need a …
I dont need a commerce degree I can just watch this
dude, effing …
love it.. I’m writing a thesis for my Swedish university on the financial crisis, and hear about this morgage backed securities and have never understood the meaning, especially since there is no direct translation to swedish 
but now it so much more clear 
BIG UPS MAN!
dude, effing awesome
but in this case …
but in this case wouldnt the first bank lose money? since it doesnt earn interest (it sold the loans to the I-bank) and has to pay those people who deposit $ in it interest annually?
Okay bt responding …
Okay bt responding to TML the NPV of the project i.e. purchasing a share will be -ve @10% disc.y will sumone purchase it…??
It sure is amazing, …
It sure is amazing, the banks are the ones who win with these mortgage back securities. The people loose because they owe that bank regardless if they loose they job or not. I want to open a bank… LOL
@tml337
They pay …
@tml337
They pay $1100 up front to get $100/year
for 10 years. So they get a total of $2000
paid back at the end of the 10 years.
($1000 principle + $100/yr * 10 yr interest
payments). This is appealing to pension
funds or retirees bc they get a steady
stream of interest payments.
Why would the …
Why would the investor slash new shareholder pay $1,100 up front to only get $1,100 over time? I’m gonna assume you meant that they pay a lot less than that but that the investment bank that created the corporation still makes more than what they spent.
@honolulutradewind
…
@honolulutradewind
- GrammLeachBliley Act 1999
continued.. who …
continued.. who made the extra layer and stimulated the purchases, are the ones who should be bailed out. Hmm.. do you have lessons on the bail out plans and the medical overhaul?
So.. the person in …
So.. the person in the red is the person who went to buy the house. He also purchases those stocks for his retirement, and he is the one who loses his job. Since he is losing at both ends, he kind of changes the easy money scene for those with their secure securities. Without those taking out the home loans and buying the stocks disappear from the market because they have no job. Ok.. thinking thoughts. I’ll go back to listening. I’m waiting to hear why in this framework the large companies
Since the investors …
Since the investors are buying loans, its a type of bond.
So this “shares” …
So this “shares” are stock or bonds?
It makes 5m risk …
It makes 5m risk free, but it could have made much more with some risk in the long run (according to this model) if it would keep its loans. The irony is that if banks starts to behave this way the banks who operates more traditional (not sell their loans) would be stuck with all the downside if (when) the housing market tanks. So a bank has every incentive to get rid of housing loans and make short term profits and thus further increase the incentive to make rotten loans.
i think it is …
i think it is because they are getting cash (lots of it) every time they try this model…then they can replicate it again and gain more cash in one short period of time rather than over the course of 10 years even if it would have been more.
someone correct me if i am wrong.
Amazing!!
Amazing!!
well done
well done
Who allowed the …
Who allowed the Banks to sell their right to the investment bankers? Who manipulated or changed the law/rules/ regulations? Unbelivable. Unlimted greed. super presentation.
Who( Entity) is in charge of the rules and regulation of the banks?
Who allowed the …
Who allowed the Banks to sell these right to the investment bankers?
Obviously there was a law or rules and regulations, who broke all these for their greed. Unbelievable.
thank you for your presentation, superb!
superb presentation
superb presentation
Thanks so much for …
Thanks so much for this series. I’ve been wondering what was at the bottom of this whole mess for a while now.
Great presentation …
Great presentation — so helpful.
What is the Key …
What is the Key disfavors by Having Your Mortgage
realmortgagepaid.blogspot. com
K110, if you are …
K110, if you are referring to the bank that 1st made your loan when you ask about the “small commercial bank”, by selling its loans it is deferring the risk to the purchaser of these loans. Remember in this vid and a previous one that the small commercial bank receives a fee for acquiring the loan (I think 5000 is used) it would receive 5M (5000X1000) on virtually no risk (which has all been deferred with the sale of the mortgages). Therefore the bank makes a basically risk-free 5m profit.
Why would the small …
Why would the small commercial bank sell its loans when it would earn much more by keeping them and collect the payment stream from the borrowers?