Understanding the Fractional Reserve US Banking System
The following infographic explains how banks make money from the deposits of customers. Fractional Reserve Banking is a banking system where banks keep a fraction of deposits from a customer, then use the rest for loans to other customers.
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Assessment
Wiki: http://en.wikipedia.org/wiki/Fractional-reserve_banking
- Short Sale versus Mortgage Foreclosure
- Video on Physician Loans and Doctor Mortgages [Why Over-Pay Big Banks?]
- On the Emotional and Financial Returns of Paying Off the Mortgage
- Rethinking the Reverse Mortgage Paradigm
- Using Home Mortgage Brokers
Conclusion
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Filed under: Funding Basics, Financial Planning Tagged: | banks, home mortgages, home loans, Fractional Reserve Banking System, FRAC, mortgage brokers
Banks
In a low interest environment like today, some banks may actually make little or no money on checking and savings accounts.
That’s why they push all the related junk fees, and have done away with the freebees, etc.
Larry
What is a jumbo loan?
A jumbo mortgage certainly isn’t your conventional home loan. It’s bigger.
http://realestate.msn.com/what-is-a-jumbo-loan
Find out who qualifies.
A Banker
Banks will make less and less from home loans
“There is a power shift from banks to customers, who are demanding choices and more transparency into the mortgage application process. This shift makes it nearly impossible for lenders to sustain differentiation based solely on price or product.”
Tom Mataconis
Vice President
Carlisle & Gallagher
Any thoughts?
Joseph
Hedging Mortgages
John Paulson rose to fame after he made $15 billion for his firm in 2007 by betting against subprime mortgages before the housing collapse.
Since then, however, he has struggled to duplicate that success, and several of his portfolios have lagged in recent years.
Dr. David Edward Marcinko MBA