[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.

[Earthdweller]

Holy crap...I just realized something! All this bad paper with mortgages will probably go back to Fannie/Freddie! They filtered it out as AAA when it was bad..sold it to the investment Banks, then we pay for the bad portion and they get it back to "manage" it all shiney and new!

They might as well have come into our homes...stole thousands of dollars from us and gave it to someone else as a handout!