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this post was submitted on 14 Aug 2026
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Maybe I'm stupid, but how does a mortgage company lose valuation when premiums increase?
Like hello, your returns are now greater than before. Did they make some AI calculation, for locked interest rates for their customers and then financed it by taking on fluid interest rates as a company?
Their whole business model was based around getting people to refinance. When rates are up, people don't refinance.
US mortgages are almost always fixed-rate, so increased interest rates don't change the premiums for existing mortgages, hence the drive to refinance when rates are low.
A lot of them are variable-rate which is just insane. You're allowing your mortgage lender to charge you whatever interest rate they feel like charging, with your only out being the hassle of refinancing.
I've read that that's common in other countries, but I haven't heard of any here.
It used to be more common, but I think it got a lot less so after the 2008 economy did its thing. At least that's my anecdotal impression.