See: Mortgage.
Remember being a kid and finding something super awesome on the shelf at the store (like an economy-sized box of M&Ms or a BB gun), but then being frowned at and told to put it back when we tried to sneak it into the cart? Well, a “mortgage putback” is kind of the same thing. It’s a mortgage that has to be repurchased, or put back. In other words, the originator of the loan has to buy it back from the current mortgage owner. Mortgage putbacks exist not only to protect the mortgage owner, but also to protect investors in mortgages and mortgage-backed securities.
When putbacks happen, it usually means that something about the mortgage just...isn’t quite right. For the most part, the “not quite right” part usually has to do with negligence or fraudulent practices on the part of the original lender. This was especially prevalent leading up to the 2008 subprime mortgage crisis. Lenders were issuing mortgages all over the place, sometimes without confirming the income, assets, etc. of the potential borrowers, and sometimes without bothering to adhere to their own laws and rules. Since then, of course, there have been plenty of regulations put into place to address the early aughts’ lawless wasteland of mortgage lending. But in the meantime, if we suspect any of the mortgages in our lives of not being up to legal or regulatory snuff, the mortgage putback avenue might be one worth exploring.
Related or Semi-related Video
Finance: What is a Mortgage?345 Views
Finance allah shmoop shmoop What is a mortgage Well people
a mortgage is just dead it's alone but one with
special tax treatment For most people simply put Any interest
you pay on a mortgage to buy a home is
tax deductible Morty morton's inputs down a hundred thousand bucks
to buy a home that costs four hundred big ones
his mortgages three hundred grand at five percent interest per
year So that's fifteen thousand dollars a year he pays
to rent the money from the bank which he uses
to buy his dream home with the loop de loop
waterslide Morty earns one hundred grand a year and pays
tax on his last fifteen thousand of earnings soas faras
The irs is concerned since morty can deduct his fifteen
thousand dollars in interest against his earnings he does not
in fact earn taxable wages of one hundred grand annually
Instead he earns taxable wages of eighty five thousand dollars
a year Essentially with government is doing is sharing in
some of the cost of renting the money Taub i'm
ortiz home well why would the u s government be
so charitable Well because home ownership has been integral part
of the american dream since the u s of a
i po'ed in seventeen seventy six easy access to mortgages
and then home buying can be a hugely beneficial asset
In the vast majority of cases homes create family stability
a store of wealth and tax dollars for local schools
in the form of real estate taxes So don't feel
bad about splurging on that water slide there Morty Just 00:01:42.93 --> [endTime] remember you're doing it for the kids Hello
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