Re: Greenspan suggests bailing out failing "home-owners"?

On Mon, 17 Dec 2007 05:06:41 -0500, "basilod" <basilod@[EMAIL PROTECTED]
>
wrote:

>Today we have heard that even Alan Greenspan is suggesting that the US 
>government should bail out millions of fake “homeowners”  created when he

>was at the whelm of the agency very much responsible for the US fiscal 
>policies.

Nobody's bailing out the homeowners who are really struggling. A
freeze on the interest increase keeps some folks in their homes but
not even 25%. The entire exercise just delays the calling of the loans
which are no longer mortgage loans with property as an asset against
the loans. The paper is now owned by institutions and investors all
over the world. If they called these loans there is not enough cash in
the entire country to pay them off. The original holders of the paper
would have to foreclose on all these properties at about .60c on the
dollar. The worst meltdown in US economic history would ensue. Credit
would almost totally dry up.

It's the damn greed of the morgage underwriters who caused this entire
event. They felt that real estate would continue to go up and
therefore cover their $0 down loans. Secondly much (about 40% in CA)
of these homes are owned by investors seeking a quick buck on
turnovers. Guess what - this time they lost. Another group of
investors in real estate are those who sought to make their homes cash
cows and refinanced ad nauseum. They used the money for mostly
consumer purchases which fueled the economy for the past decade.
There's plenty of blame to go around and most of it falls upon the
mortgage industry and greedy investors - not some poor schmuck trying
for the American dream.

WB Yeats