I would love to buy back my personal mortgage which supposedly is somewhere right now trading at 20-30 cents on the dollar. I would pay that much for it....in second, twice as much for that matter.
If you have the money to pay back any part of your mortgage or even keep it current you have the great privilege to continue on as if you haven't lost anything. Further more the government will be by shortly to confiscate those extra payments to help reassess mortgages for those who can not pay. You will be getting a "They Bent Me Over and I Didn't Like It! T-shirt in the mail in 6-8 weeks to help you feel better about the whole thing. Sincerely,
Insight from someone who has been there, done that__ For many months I safely sheltered your account from the financial hurricane, while most of the "buy-and-hold" public's investments suffered double-digit losses. This Thursday past I bought near the bottom. Your account value immediately increased from the government bailout optimism and 'panic relief' rally late Thursday and Friday, and which may continue this coming week. I didn't just buy any old stock either. I bought a fund engineered to rise 2% for every 1% rise in the Dow. Purchased at 56.16 on Thursday. Closed Friday at 60.22, a quick overnight gain of +7%. I always like to start a position with a quick profit. That way we have a cushion in case we need to exit, and we are ahead if the trend continues upward. That's news for your account. Following is a modest proposal for Treasury Secretary Henry Paulson. Let me know what you think of this idea. What to make of Paulson's bailout? There is a justifiable public outcry when taxpayer money is used to bail out banks, brokerages, pension plans that made leveraged-to-the-eyballs risky investments. Instead of complaining and feeling hopeless about the government placing future generations into a mild form of indentured servitude, here's a modest proposal to more equitably balance the risks and rewards. First, let's see boil down what is happening: the government plans to buy billions of bad loans at a discount, then sell them when they can for whatever they can get. On a smaller scale, they did this during the S&L crisis about 18 years ago. A bit of personal history for perspective: During the S&L crisis in the early '90s I attended a government auction and tried to participate. Mortgage loans were bundled and sold in $10 million blocks. A packed roomful of bankers and brokers bid for them. They sold for about 60 cents on the dollar. One block contained a loan in it on a rental I owned. So I asked the government auctioneers if they would break my loan out of that block and let me bid. They refused. So I watched my loan change hands at 65 cents on the dollar, while I was still obligated to pay 100 cents on the dollar. I approached the successful bidder, Dean Witter, and got his card. In a month I called him to ask if I could buy my loan for 80 cents. He refused. He sold it for 70 cents to a bank in Texas. I called them and offered 80 cents. He refused. He sold it for 75 cents to another bank. So I got the message. Theirs was a closed club of bankers, and I, as a simple serf of the taxpaying public, was not a member. So my modest proposal is this: Use the free market to distribute rewards and risks on a scale where public taxpayers can voluntarily participate. In the upcoming Neo-RTC sales about a year from now, sell the loans individually at public auctions. Let borrowers bid on their own loan. Let the public bid on them with their IRA money, if they so choose. In other words, share the possible profits with the taxpaying population, in a form of democratic debt relief. Perhaps an investor will buy a loan for 65 cents, and sell it to the borrower for 80 cents. Investor makes a profit. Borrower receives some relief. And for transparency, publish what the government paid for the loan as well. This will stimulate the economy tremendously from the grass roots up in a true, free-market fashion. Eighteen years ago the Resolution Trust Corporation argued with me that it was too much paperwork to sell the loans individually. The internet has changed everything. Now, it would be easy to publish all the loan details, and conduct online auctions. More exposure means better bids. Everyone wins. Except of course the old bankers club that profited in the previous cycle. Otherwise, if this is not done, this cycle it will be foreign sovereign funds coming in to bid, and homeowners will be making their payments to Beijing and Dubai. best regards, Easan
This is a brilliant idea but no need for the government to do so or agree, some enterprising soul could set up an exchange where this debt could be broken down to its indiviudal loans and be bid on by all. Funds or wealthy individuals could buy the tranches at a discount and sell them off on the exchange. Looks like such an exchange already exists for CMBS, why not RMBS too? http://www.debtx.com/
What to make of Paulson's bailout? There is a justifiable public outcry when taxpayer money is used to bail out banks, brokerages, pension plans that made leveraged-to-the-eyballs risky investments. ----------------------- I apologize for going off topic. I'm a taxpayer and I'm not upset with the bailout. Over the years the gov't has done worse things than this with our tax dollars. 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; 72 federal programs dedicated to assuring safe water; 50 homeless assistance programs; 45 federal agencies conducting federal crimi_nal investigations; 40 separate employment and training pro_grams; 28 rural development programs; 27 teen pregnancy programs; 26 small, extraneous Kâ12 school grant pro_grams; 23 agencies providing aid to the former Soviet republics; 19 programs fighting substance abuse; 17 rural water and waste-water programs in eight agencies; 17 trade agencies monitoring 400 interna_tional trade agreements; 12 food safety agencies; 11 principal statistics agencies; and Four overlapping land management agencies.[20]
RFT wrote a piece on this topic on his blog. The bottom line is this: it will not happen because those mortage are worth more. Mortagage are just a scapegoat. They are not the reason of all this mess. I provide the proof that until they accept to sell those mortages at double the current price, the reaon is not mortgages, and there are thiefs and frauds going on.