The point of the story was that if you have something critical to communicate, you can't do it using the same methods that are also used for low-priority mostly junk and expect it to be acted upon. Surely a mortgage servicing company can afford to FedEx an envelope. I wouldn't expect Influx to do so.

For that matter, registered mail is another option that isn't as expensive as fedex... there's other options that are slightly more costly, and more noticeable than sending via the same structure that junk mail goes through.

I expressly don't use automated payments for my mortgage and auto loan(s) as I don't want to have an account miss... I didn't know my mortgage was sold/changed a couple months ago until I went online to change. The same happened with an auto loan a few years back as well.

The price doesn't matter in this analogy since it still mostly works

When you buy a large, registered debt such as a mortgage the cost of Fedex'ing everyone should be factored into the sale. If that's too much money you shouldn't be buying such assets. Notifying those that are affected properly would seem to be the least you can do in such situations.

Exactly and they’re find sending junk mail all the time and FedEx isn’t that expensive for large businesses like that.

At least here in Germany junk mail senders actually get reduced rates.

At the end of the day you are the one who pays for the fedex though.

Not really, no. Mortgage payments are interest and principal, not administrative fees beyond what you paid when you signed the original contract.

Whatever costs are imposed broadly an industry are covered by customers of that industry. If mortgages are more costly to buy, they’ll be more costly to originate.

The consumer doesn't bear 100% of the costs though. If mortgages cost $1mm to buy, they wouldn't cost $1mm to originate. They'd cost a little extra by being illiquid - the same amount as if they cost $2mm to buy.

The consumer nearly always bears 100% of the costs - because most companies sell at a profit.

The final price is a combination of all costs incurred + a profit percentage imposed on the consumer.

If all customers would receive fedex mail, then the costs of this fedex would be pushed on them somehow. Probably by making them pay slightly higher interest rates or by introducing some one off handling fee.

Profits aren't a fixed number.

Of course not, but financial products are priced and offered with a financial outcome (usually a margin) in mind. If you make mortgage processing more expensive, you'll find the offers for origination are worse than if mortgage processing were less expensive.

Sorry, it's a ridiculous argument. Mortgages get bought and sold all the time and clearly the buyers are on the hook for the communications costs and these do not pre-emptively get priced into future products by the sellers. I'm sure that there are situations where your argument has merit but this isn't one of those.

No one is saying that existing mortgages would be re-priced. Those are contracts and you can't unilaterally change them. What I and others are saying is that if you changed the obligations of buyers such that mortgages became more expensive to service, that those servicing cost increases would ultimately be borne by the mortgage borrowers rather than eaten by mortgage lenders out of the goodness of their hearts.

> these [communications costs] do not pre-emptively get priced into future products by the sellers

They 100% do get priced in. Whenever you buy a product, you're paying all the costs of that product. When someone originates a mortgage, they're aware of the secondary market for mortgages. If that secondary market is eroded by a significant increase in communications costs, that reduces the willingness of a secondary buyer to bid for your book of mortgages. That erosion reduces your projected profit on originating, so you take a little longer to lower your offered rate to 5.250%, or you charge a bit higher origination fee, or whatever to ensure you maintain a viable business. So long as these fees hit the entire market, the other originators are all making the same calculations.

It seems odd that you [seem to] think that money for these costs would just result in reduced profits for the financial services companies rather than in increased borrowing costs.

> What I and others are saying is that if you changed the obligations of buyers such that mortgages became more expensive to service, that those servicing cost increases would ultimately be borne by the mortgage borrowers rather than eaten by mortgage lenders out of the goodness of their hearts.

I got what you and others are saying but I've been trying - and failing, apparently - to point out that the costs for a mortgage in case of a sale are born by the buyers who are not even the same kind of institutions as the parties that sell them, and so they are in no position to charge the subjects, nor are the sellers going to price the mortgages any higher in the future because the costs aren't born by them.

There is no such thing as 'projected profits' that go into this because mortgages can be sold (and are sold) more than once, the number of times is not known when they are issued first. And it is going to be only a small fraction of the audience that is going to be hard to reach for whatever reason. The presumption that there is some kind of free market mechanism that will ultimately pass those costs back to the original mortgage underwriters is not in any way evidenced by present day mortgage prices. On the sum total of mortgages out there and the - exorbitant - profits they create for the lenders we're talking about such small amounts that it will make zero difference.

A 'significant increase in communications costs' would translate into that being something that is some noticeable percentage of the total yield over the remaining time and it just simply isn't. Typical mortgage rates and amounts utterly dwarf the costs of a one time notification, especially if you don't have to notify everybody like that, and you can try cheaper channels first until you have a hit. Besides, the original mortgage 'service charge' is already a large multiple of the various costs and tends to be mostly pure profit for the initial lender.

It seems odd that you [seem to] think that mortgages are priced such that the mere cost of communications is going to show up in the prices, they are amongst the most profitable financial products.

> On the sum total of mortgages out there and the - exorbitant - profits they create for the lenders we're talking about such small amounts that it will make zero difference.

If it made zero difference, they would Fedex the documents, but they dont.

>I love the scream test, but the analogy you bring up actually - this seems unfair. The cost of Fedex'ing everyone is astounding

I wouldn't be surprised if the cost difference is negligible, maybe a couple bucks per mortgage? FedEx bulk discounts can be pretty massive