"It's not difficult to sell. I remember that the annualized interest rate of the loans you issued is generally 12%, and the cycles are also very similar. This is easier to package and easier for them to operate after they get it. In theory, it is not difficult to sell, but it is relatively

Difficult to sell at a price..."

"How do I explain this? Suppose I now have a ten-year housing mortgage with a total amount of 10 million. I have generally paid it off for half a year, and the time is almost up this year, that is, I have repaid a total of 18 installments. Assume that I have paid back the principal and interest in equal amounts every month.

Standard, if paid annually, the monthly principal and interest receivable is US$143,470. Suppose I want to package it and sell it early next year..."

Carter called the waiter, asked for paper and pen, and started calculating on the spot.

"The principal and interest I have received from this loan total more than 2.582 million. The principal balance of this loan should still be..."

"The interest payable in the first month is 100,000, the principal has been repaid 43,470, and the loan amount at the end of the month is 9,956,530; the interest payable in the second month is 99,565.3, the principal has been repaid 43,904.7, and the loan amount at the end of the month is 9,912,625.3;

Months..."

"The interest payable in the 17th month is 92,498, the principal is 50,972, and the balance at the end of the month is 9,198,828.8; the interest payable in the 18th month is 91,988.3, ​​the principal is 51,481.7, and the balance at the end of the month is 9.1 million yuan in outstanding loans in this loan pool!

240 installments over ten years, minus repayments

Of the 18 periods, there are 102 periods left. The repayment for each period is US$143,470. This means that in the remaining eight and a half years, if there are no losses such as bad debts, this loan can theoretically be turned into cash of 14.63 million! What do you think?

How much money can that Federal Mortgage Association offer to buy out my loan?"

Dropping the banknotes, Carter let out a sigh of relief.

In the era before Excel, it was really terrible to rely on manual calculation of equal amounts of principal and interest. The disadvantage is that I only paid 18 installments, which is not much. It would be easier to calculate. If there were more installments...

"You signed these contracts with equal principal and interest repayments?!"

Just as Carter was rubbing his sore wrist, Julian was no longer calm.

As mentioned before, before the 1980s, one-time repayment of principal and interest was more popular in the United States. This method has pros and cons. The pros are naturally more interest income. For example, an annualized interest rate of 12% will be 120% in ten years.

Interest income, plus principal. But the disadvantages are naturally obvious: the cycle is too long and the liquidity is too poor! The risk of bad debts is also very high!

Therefore, this repayment method is withdrawing from the mainstream market, at least in medium and long-term loans, and is no longer common. But even so, the annual repayment model of equal principal amounts is more popular now.

That is, a loan of 10,000 U.S. dollars is repaid in ten years. In the first year, the principal payable is 1,000 U.S. dollars, the interest is 1,200 yuan, and the total amount is 2,200; in the second year, another 1,000 principal is paid, the interest is 1,080 yuan, and the total amount is 2,080; in the third year, and so on, the final ten

In the year, the loan institution could recover a total of US$16,600. This is equivalent to a total profit of 66% over the book duration of this ten-year loan.

So who is Carter here?!

The principal and interest are equal, and they are calculated monthly and paid annually...

At the same interest rate, if ten thousand is lent out, the accumulated accounts receivable after ten years will be US$17,216. The total profit rate is 72%...

The profit margin difference of 6% may not seem like much on its own, but if you enlarge the number or lengthen the period: 6% of 10 million US dollars, that’s 600,000!

"Yes, they are equal amounts of principal and interest, and are repaid on December 10th every year. Of course, the last installment is calculated based on the loan period. This is different for everyone, but generally speaking, the repayment dates are relatively close.

Basically, it can be paid off within one month in 1990."

Carter nodded and replied very confidently:

"When they signed this way, the pressure would be less for them. If it was an equal amount of principal and the loan was 100,000, they would have to repay 22,000 in the first year. If it was an equal amount of principal and interest, they would only have to pay back 17,000...

"

"To be honest, I don't think I'm going to sell this 10 million loan. This loan is a special loan for ht franchisees. Judging from the current store profits, this money has basically not been repaid.

It’s possible.”

"That's it, but if you really enter the open market, you still have to look at the value of its related objects. When you signed this mortgage loan, what was the collateral? These people's shares in the ht store, or their original residences?"

Julian's question instantly made Carter embarrassed...

"Residential..."

"Then it's over. The housing prices in your place are not high now, and it is difficult to see improvement in a short period of time. So these people's store shares are actually...it can't be said to be useless. They can use this to promote and promote these things.

Loan customers have sufficient repayment ability..."

Julian touched his chin and suddenly felt that Carter's loan was turned into MBS, which seemed to have a lot of room for maneuver!

"You just said that the multiple loans with a principal amount of 10 million were all lent by the store owners of ht, right?"

"Yes! All of them!"

Carter nodded affirmatively...

"Are there any restrictions on early repayment? Is it stated in the contract that early repayment is not allowed?"

"This is only for three years, and there is still one and a half years left. Early settlement is not allowed within three years..."

"You...oh, forget it..."

Julian was suddenly discouraged when he heard this...

"This is troublesome. The ht store makes money, which certainly guarantees their repayment ability, but now the ht store is so profitable that it makes the loan worthless. The possibility of early settlement increases, and the expectations for this loan

In terms of income, it’s not good news! If you have a clause that restricts early settlement, then your loan will definitely be sold at a good price. What a pity! What a pity!”

"Then what do you estimate is the maximum amount that can be sold now?"

Carter was stunned when he heard this, feeling not good...

"It is estimated to be around 10 million at most. Your current loan principal is only about 9 million. The expected income is 14 million. Of these 4 million... Federal National Mortgage Association will earn a little; securities underwriters

You have to make a little profit; the service provider has to make a little bit more, and the rest has to be reserved for investors... Ten million would be good."

Ten million?!

Carter touched his chin, adding the total of 2.58 million US dollars that he had already received and would receive in two weeks, which is equivalent to a total profit of more than 2 million US dollars for this loan, which is more than his own

The expected 30% revenue is even lower!

Although it can transfer risks and realize them quickly, the loss of profits in the middle still makes Carter feel a little distressed...

"This loss is a bit big. Is there any way to increase some profits? For example, these links in the middle, what positioning do they assume? Is there anything I can do myself? If so, can I spend less money to go out?

?”

"What should I say about this? You are in urgent need of money now, right?"

After Julian hesitated for a moment, he asked.

"Well, it can't be in a hurry, but it would be good if I could get a quick turnover of money back!"

"It's hard to get around the Federal National Mortgage Association. Apart from them, there are very few institutions in related industries that can spend $10 million in cash at a time, and their role is also difficult to replace. After all,

As an issuer, their credibility will be stronger, and they are also federal agencies after all..."

"The rest, securities underwriters, you definitely can't do this. You still have to pay the commissions that should be paid to investment banks. Only service providers, you can consider this..."

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