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To: Reverend Wright

It would be nice to know what the numbers are. I gotta think somewhere they have the numbers. How many of the mortgages upon which the bad paper is based are in default. That at least gives a starting point for how much money is needed. Maybe I am wrong, but right now I get the impression that Paulson doesn’t have a firm handle on this and that the $700 billion figure has been plucked out of thin air.


47 posted on 09/27/2008 9:07:12 PM PDT by vbmoneyspender
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To: vbmoneyspender
Another issue that I don't have a good grasp on. If the Treasury Department buys the bad paper, does that give them the right to foreclose on the underlying property if it goes into default? Or does the originator of the loan have to foreclose and then assign the proceeds to the holders of the derivative interests in the mortgage?

Likewise if the mortgage has been sliced and diced, does the originator of the loan foreclose or do the holders of derivative interests foreclose. The point I am getting at is that logistically, it seems that the Treasury Department is getting itself into something far beyond what it has any expertise in. From what I have read, it doesn't even seem like we are talking auctions of real property. Instead, what is being dealt with are pieces of paper made up of a portions of interests in multiple mortgages some of which may not be in default and some of which may be default.

49 posted on 09/27/2008 9:18:32 PM PDT by vbmoneyspender
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To: vbmoneyspender

I can’t find the link but somewhere in the Minyanville articles on this crisis they previously pointed out that there is $700-800 billion in corporate paper to be refinanced this year. That may be where Paulson got the $700 number from.

http://www.kitco.com/commentary/old/roulston/roulston_sep272007.htm

this article has a brief description of how mortgages of various default risks are stratified within a mbs.


55 posted on 09/28/2008 6:47:38 AM PDT by Reverend Wright (On October 15, Stephane Dion will be the former leader of the Liberal Party of Canada)
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