Spot on analysis here.

Mortgages have been bought and sold numerous times. Most lenders don't even know who actually owns the mortgage. That's a problem. You can't refi a loan because no one can identify what lending facility owns it.

There was an example I remember from a year or so ago. Dude in Miami owns a $3M house. Isn't making payments on the house. Lender calls him and says he owes. He says, "tell me who owns the mortgage and I'll pay them directly." Lender comes back two weeks later and says we don't know.

Dude is still living in his house.




Quote Originally Posted by tequila View Post
I cannot emphasize enough how much this did NOT occur. Again, the majority of bad mortgages in the current crisis were not sold because the government "forced" them to do it. Absolutely not.



I was referring here specifically to the big investment banks, hedge funds, private equity, etc. that make up the shadow banking system that is in the process of collapsing. Goldman Sachs especially has a stranglehold on the Treasury Dept.



Not sure if you guys have been paying attention, but it's not exactly like the "market" is begging for these solutions you proffer. The market is in the process of collapsing or folding up shop at the moment. Things like cutting capital gains taxes on MBS are rather beside the point when no one can accurately value them right now. Changing home loan payment terms would be nice if anyone could figure out who owns what terms on which set of loans --- the whole key to this process is the degree to which these loans were securitized and leveraged to a whole slew of different counterparties up the stream from the initial lender.