Apparently the “Big Five” Mortgage houses (Chase Manhattan, MSNB, Citibank, Wachovia, BankAmericorp) have conspired to create a fund that will allow them to pull homes that have foreclosed “off the auction block” where they will sit empty until the market conditions improve. This was all arranged at the USTreasury under the watchful eye of Secretary Henry Paulson!!! Thus they have the Bush Administrations approval to fix prices and restrain competition, artificially keeping housing prices high. Funny, I thought the “free market” was supposed to help consumers.

Should you pass this way again, cinnamonape, where’d you hear a thing like this? Is this perhaps the so-called M-LEC, or what I above called a “super SIV?” Those banks and Paulson were involved in something like that, that actually seems to have leaked out prematurely, perhaps by a whistleblower. No one is sure, but the idea might be dead. It met with a lot of disapproval and derision, including from people who might have been expected to support it.

The M-LEC would not have bailed those banks out from direct holdings of repossessed real estate. It would have served as a backstop to allow them to get second- and higher-order bundles of loans and related products out of their lives without having to take the things onto their own balance sheets, without selling them out in the open where everyone could see how little others were willing to pay for them (forcing those Level 3s to mark to a revised model), and without their having to clog up the credit markets (or their own llending resources if they still have any) in order to pay off the investors who are supposed to get the cash flows from the things (from which cash might not be flowing as planned.)

Once Biden, Schumer, and Clinton passed their Bankruptcy Bill, forever screwing most mortgage and credit card holders, it was off to the races.

Get out of the way, people. The is a financial tsunami headed our way.

part of a ‘perfect storm’ of domestic Constitutional alarm, domestic financial calamity, foreign military chaos and political shock

If this isn’t the perfect kind of environment for an ‘outsider’ Progressive Dem to win in, then I don’t know what would be.

Still, the work to repair damage after taking office would be tremendous, like walking through NOLA with a shovel and pail.

What worries me is that Bush will find the money to bail out the Mortgage lenders and the Hedge funds who bought the loans but he still won’t fund healthcare!

Apparently that industry has yet to feel the full force of the cold steel blade the Bush family wields so well. Right to the back, works every time. Just ask their former business partners (Noriega, Saddam, bin Laden).

Re: Citi..Rut..Roh:

BOSTON (MarketWatch)
Citi ) in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management’s best guess.

link

Doesn’t make Rubin et al look so brilliant, now does it?

Evil Dr Puma,

I bought in Phoenix on a teaser 3-2-1 buydown and lost it during the McCain-Keating Savings and Loan scam of the 1980’s

This Iowa boy bought the next time at a fixed 6%

Fool me once… Iowans are educated sometimes the hard way

If it comes down to the Dean v. Kerry race again, how will Iowans vote?

Clinton v. Obama v. Edwards?

Will they learn or will they still fall for the ‘more electable’ line?

What if there’s a smear campaign on t.v. the last couple of weeks before the caucus? Will that miraculously change their opinions?

I would be in favor of some type of program that let the folks with the bad mortgages restructure their mortgage into something more sensible, with another bank. Then let the ones that DID put out these loans sink or swim.

Won’t happen, though. It will be the other way around. *fume*

Chris Dodd was supposed to have put out some legislation to help with this. But, I haven’t heard of it coming up for a vote and I have heard some mortgage lenders have options to refinance, but are refusing to.

Apparently some people are going to make money off the misery of others.

So redlining has morphed into a new method of keeping black home ownership to a low?

The Limbo should be the new national dance.

Thug policies are generally more dangerous than that. Considering their previous policies towards Blacks, aimed at keeping them away from the voting booths, consider what lack of home ownership will do to them at the polls?

Will Repugs use this in some way to deny them the vote?

Also, democratic candidates should be asked about it at every opportunity.

Signs of Backlash Against Paulson

The gross aspect of the debacle is the Fed easing the credit crunch whiich is another name for bailing out the banks and hedge funds. The belief is that if the banks fail the impact on the economy is too great, but if the banks fail, the government’s contribution goes to the depositors through the FDIC rather than to the bank owners and operators. Home prices will come down, but that effects lenders, not home owners who have little or no equity.

The game kept the economy going. Not all sub prime lending dealt with minorities or low end real estate. Subdivisions were built and sold with no down payment financing and forclosures impact those values. Again the home owner’s investment is minimal, but if anyone is bailed out, it should be the homeowners, not the banks and hedge funds. Unfortunately that is not how it is going to go down.