Question For Financial People Re: Student Loan Securitization

[Danno]

the whole thing is fucked up, I bet if you broke those securities up and did the math my debt is worth less than half of what I'm paying, or maybe even a lot less....yet there's no way to buy it back for that amount.

sure, but that is why they are bundled up. Let's say they were sold individually. Some investors would get screwed because their loan holder defaults, and other investors do great. Same logic applies to insurance; insurance companies can afford to insure everyone because enough premiums will come in to cover the few people that have major losses. I would gladly buy an insurance company's book of business, but I wouldn't buy a single account.

In other words, you want to do math for your particular loan, but the only reason that math can be done the way you wish is precisely because they are bundled. It is the bundling up that allows them to be sold at all.

[Art Shirk]

the whole thing is fucked up, I bet if you broke those securities up and did the math my debt is worth less than half of what I'm paying, or maybe even a lot less....yet there's no way to buy it back for that amount.

The reduced market value is based on it being in some tranche and hedged against default. I don't think it really exists as a decipherable single entity on the market, and if it did, its value would revert back to "full price" once whomever owns it knows their is no risk of default because you want to buy it. It's a cruel catch 22. Curious idea for sure but it won't work.

edit: Danno seems to have the jump on me this week

[ill-advised strategy]

I mean, probably not? I bet this stuff trades at AAA or close to it. You're not getting a discount unless your loan has been placed into a high-risk tranche for some reason.

oh I'm risky brah. You don't even know.

[skaredshtles]

the whole thing is fucked up, I bet if you broke those securities up and did the math my debt is worth less than half of what I'm paying, or maybe even a lot less....yet there's no way to buy it back for that amount.

Heh. A financier, you are not.

[VTeton]

I know next to nothing about this, but I suspect that nobody is buying and selling your loan, per se, or any individual loan. What they are buying and selling are packages of loans.

Truth, if you wanna buy $1,000,000,000 of loans, I'm pretty sure we can track yours down and sell you the lot.

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[ill-advised strategy]

Can I buy $1,000,000,000 of loans, remove mine, then sell them back in 5 minutes for $999,999,000?

Now I feel like we're getting somewhere!

[Name Redacted]

Can I buy $1,000,000,000 of loans, remove mine, then sell them back in 5 minutes for $999,999,000?

Now I feel like we're getting somewhere!

If you only owe $1000, then you'd probably end up paying more in transfer fees and interest.

[ill-advised strategy]

Well, the point is that I owe like 15K, but suspect the slice of some investment that represents my loan trades at about that much once it's all disemboweled and fucked-around-with.

Fucking fees and interest.



getting blasted in the ass here

[skaredshtles]

Well, the point is that I owe like 15K, but suspect the slice of some investment that represents my loan trades at about that much once it's all disemboweled and fucked-around-with.

What sort of shenanigans are you hoping to accomplish? Pay off your $15K debt with $350?

[ill-advised strategy]

There is not a person you can ring up on the other end of your loan, and say "may I please buy this back from you at 85 cents on the dollar?" or any other price.

Your loan is in a pool of loans, hundreds of loans, of a certain maturity and credit rating, that has been sold to a pension fund who wants a steady stream of payments from you over many years (they hate prepayments, if allowed) so they can pay the retired grandma in Hartford.

Capice?

I was responding to dude's posting a link to basic information for how to repay a student loan. "I don't get it" in that context means that I don't get how that link has anything to do with the original question posed....not that I don't get that loans are bundled, and the whole raping-the-public shitshow of repackaging loans into securities.

None of this thread has provided any sort of tool or technique to see what my debt trades for, and who owns it....all it has contained thus far is some shit-talking and condescending double-speak trying to justify what is essentially a laundering operation to insulate lenders from borrowers.

To be honest, given they try so hard to conceal themselves, and it's becoming clear they've frequently chosen to forego the basic processes of documenting the loans on which they intend to collect, I'd almost like to default just to see who's on the other side of this. I probably won't, but I'm mildly tempted.

[ill-advised strategy]

What sort of shenanigans are you hoping to accomplish? Pay off your $15K debt with $350?

If that's what it's trading for, yeah. Don't you believe in markets? Aren't you a capitalist?

[highangle]

You may have to form a trust
to buy derivatives
of high-risk student loans
thus offsetting
your interest
slightly.

[Benny Profane]

Hedge your life.

[ill-advised strategy]

Motherfucker, are you trying to sell me life insurance?

[ill-advised strategy]

lol. not built for adulting.

at. all.

[digitaldeath]

Listen just ignore it for a few years. Spend some cheese on yourself instead of big govt creep lenders

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[skaredshtles]

If that's what it's trading for, yeah. Don't you believe in markets? Aren't you a capitalist?

Heh. A financier, you are not.

[BmillsSkier]

That said, if it's securitized, your loan is likely owned by a 70 yr old grandmother in Hartford CT who is depending on the 4.5% coupon to fund her retirement after working for 35 years for telephone company.

Fuck, here we go with the payphones again...

[VTeton]

Can I buy $1,000,000,000 of loans, remove mine, then sell them back in 5 minutes for $999,999,000?

Now I feel like we're getting somewhere!

Less a 4% commission

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[Dexter Rutecki]

I know next to nothing about this, but I suspect that nobody is buying and selling your loan, per se, or any individual loan. What they are buying and selling are packages of loans.

Right, I think this is where the plan falls apart. If your loan was corn futures or something, and the futures were trading below the current price of the same amount of corn, I think you could figure something out that would save you money. But I doubt your loan is figured in commodity futures and no one person owns you loand (if it has been securitized).

Just short them all for when everyone defaults and profit. Or do what those guys did last time around with CDS's.

[mall walker]

just go to the loan debt store bro

[splat]

https://www.nytimes.com/2017/07/17/b...ollection.html

[Tri-Ungulate]

That said, if it's securitized, your loan is likely owned by a 70 yr old grandmother in Hartford CT who is depending on the 4.5% coupon to fund her retirement after working for 35 years for telephone company.

Maybe he's hoping it's owned by some 70 year old goldbrick Injun granny from Taos pueblo whose kids pissed him off. That way he'll have no compunction defaulting

[byates1]

https://www.nytimes.com/2017/07/17/b...ollection.html

^ what i thought this young individual might be referring to, some traction in this perhaps.

[pepperdawg]

Well in any event if they can't prove they own the loan I wouldn't pay them, I don't care if it is a grandma in Hartford.

Damn moochin war-widows....

-Homer J Simpson