"Aside from independent advisors and retail investors, there's a Schwab asset that generally gets little mention: Charles Schwab Bank, which accounts for a third of revenues and makes mortgage and home equity loans. Delinquencies are a scant 0.05% of outstanding loans, substantially less than the 6.9% national average," Norton wrote.
Per Schwab CFO.....
Our financial discipline is also reflected in a strong balance sheet that includes a high-quality loan portfolio – mortgage delinquencies at Schwab Bank were 0.33% of outstanding balances as of month-end June, a fraction of the national average, and loan charge-offs totaled just $0.8 million for the quarter.”
Per Roger James....
You have to watch every move they make. The basic employees are clueless and just follow orders. Talk to the higher ups and note the attitude like their sh*t doesn't stink. Absolutely disgusting. Hurry up, Andrew, we need you!
I hear you about Schwab's sweep reconfiguration from industry-leading Schwab-branded mutual funds over to the little slice of corruption they call Schwab Bank. I saw it exactly for what it was, they dropped the annual maintenance fees for the smaller accounts, because it was too "in your face" with regard to people's perception. So to replace that revenue and garner more, they pulled their little underhanded sweep trick and it worked. Account losses were minimalized. Schwab customers have more than replaced that lost fee revenue, without major complaint....nickels at a time. And that's how you want things to be, pick your customer's pockets without them feeling it. Have you read my other postings about Schwab Bank's mortgage losses? Unreal, if those figures are accurate...if Schwab Bank is REALLY having loss ratios that small...they could teach the banking industry a thing or two about writing mortgage business. I believe that Schwab Bank is fudging somehow....no evidence...I just feel it.
Agree, they were hungry to get into the market and abused their brokerage clients in order to get the capital to start the business. Ever hear of a bank sweep account for brokerage customer? Neither did I, until Schwab swept all its small client business into the bank. Now, Schwab claims that the Bank is a separate business. Not that separate when the money sweeps back and forth between the brokerage and banking arms of the company everyday. Bet this leaves open some interesting accounting opportunities.
I really need to close my account. I hate this company and have since 2002.
Only thing worse then their bank sweep scheme to opportunistically fund their mortgage business at expense of their brokerage clients, is their crappy fixed income department. Hate those sons of bitches.
Probably required 20% down? Don't count on it...Schwab Bank was hungry to enter the game and competition among mortgage brokers was fierce. Schwab is still selling the 10 year Interest Only mortgages...isn't that kind of like renting?
It is very hard to tell what you mean by 'select client group' You didn't need to have to have a brokerage account to get a Schwab mortgage, but you probably did need to be able to make at least the traditional 20% downpayment before they would consider you.
You didn't need to have a Schwab Brokerage Account to obtain a Schwab Bank mortgage. You're right that they directed the majority of their marketing effort at the existing client base, but all were welcome. Schwab Bank was a young bank just trying to get in the mortgage game for the first time, they just happened to pick the upward slope of a housing bubble to make their mark. Just bad luck.
I only deal in truth...check out the national deliquency rates....
Schwab Bank's is at 0.33%. I would grant that Schwab may have high standards, but the figure they're pumping out is just plain ridiculous. Here's a challenge...name another Bank anywhere in the US that has a delinquency rate anywhere close to Schwab's. The majority of Schwab mortgage holders are underwater and they have a miniscule delinquency rate....Go Fish.....