That's assuming a lot daniel
I estimate 99% of banks don't keep their loans. So those figures don't work at all, in the slightest. This eleminates the deadbeat statement. Just think if it really had to work like that and any bank could just loan money this way. Their guidlines would all be different and very strict. Like before the days of Fannie Mae.
Here's a quick rundown of how it works.
The are two separate profit centers after origination.
The Loan and Servicing
Loans are originated in the primary market and sold in the secondary market. Smaller loans are sold to Fannie Freddie etc because they "conform" to their guidlines. (Conforming Loans)
Servicing is kept or sold as well. The servicing is what you see on your bill or in your credit report. And when they send you a letter that they sold your "loan" they really sold your servicing. (The collecting of the money each month)
The profits are based off of indices such as the 10-year bond yeild for 30-year notes or some other index such as the LIBOR (London Inter Bank Offered Rate) etc. for other types of loans. The spreads along with the indicis change all day every day, making one loan more attractive than another.
I was giving 3.75% jumbo ARMs a while back and now they are above 5%. Margins on those ARM's were sometimes below 2%!! Fixed products were best when the 10-year bond was below 4.0%
Anyway, it's much more profitable for the "Lender" to sell the loan, take the hugh profit and increase their warehouse line to do it all over again, than it is to portfolio the loan themselves.
It's kinda funny that we might buy a CD to make 3% or a bond to make 5% as individual savings investors but we (the collective of consumers) pay 6% on a loan of our own money. (from the collective) Because the investors in the secondary market are buying and selling the money back to us as a different investment. It's all very complex and I'm not an expert at the investing part by any stretch of the imagination. More like a student