How Banks Get Rich Off Your Mortgage

Before you go, we thought you'd like these...
Before you go close icon

In this segment of The Motley Fool's everything-financials show, Where the Money Is, banking analysts Matt Koppenheffer and David Hanson discuss how banks generate revenue when issuing residential mortgages as well as after the fact.

Matt and David break down the revenue stream into two basic parts, gains on sales of mortgages and servicing fees, and explain to investors how to read these results.

Will higher mortgage rates crush the rally?
Banks will be releasing second-quarter earnings over the next few weeks. Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


To follow The Fool's coverage of financial stocks, click here!

You can follow David and Matt on Twitter.

To watch Where the Money Is in its entirety, click here.

The article How Banks Get Rich Off Your Mortgage originally appeared on Fool.com.

David Hanson owns shares of JPMorgan Chase. Matt Koppenheffer owns shares of Bank of America and JPMorgan Chase. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners