mortgageaudits
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Joined: Dec 2012
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Thursday December 13, 2012 12:24 AM
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Securitization Is Key
Oppenheim says the only downside he can think of would be if Walmart securitizes mortgages instead of managing them like a portfolio lender. When a mortgage is securitized, it is bundled and sold off to another entity, creating a split between the ownership of the mortgage and who services it. Large banks often do this.
A portfolio lender, on the other hand, holds onto ownership and typically offers more services to the consumers who owe the mortgage: “If a bank holds on to your mortgage, explains Oppenheim, you can refinance, amend it – there’s a lot you can do with a mortgage.” Once it’s sold or securitized, it gets much harder to know what’s going on with your mortgage.
So how will consumers be able to tell if Walmart’s going to do that? Read the fine print on the mortgage contract; all mortgages providers are required to disclose the likelihood that they will sell or securitize your mortgage. “We don’t know if Walmart will securitize them,” Oppenheim says.
More competition for banks would be a good thing, he continues. “The introduction of a new kid on block with cojones would be great.”
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