Mortgages Are a Manufactured Product
20th May 2024
Why is it so hard for entrepreneurs to get mortgages? Why did the address I send my payment to change? Why don’t most banks own mortgages anymore? Why is there a thriving economy of small specialist lenders locally who only do mortgages? Why is a 30-year fixed rate mortgage available at all?
Welcome to the wild and wooly world for mortgages in the United States: the world’s most important manufactured product that virtually no users understand. For starters, virtually no one outside of the value chain considers a mortgage a manufactured product at all. Most people who own homes think they were the primary customer of the mortgage, but that’s not true.
The reason that people in ‘finance’ make eye-watering amounts of money is that they enjoy working in mathematically-complicated areas of the economy that make most people’s brains hurt.