The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: yard_man who wrote (15340)	12/6/2003 10:42:40 PM
From: Elroy Jetson	Read Replies (1) of 306849

A portion of the loans purchased by GSEs are variable rate loans. The GSE can recapture the capital from these loans by selling bonds to the public which step-up in proportion to the underlying loans. Although they have long sold these products, they have not been actively marketed to the general public. To me the article strongly suggests Fannie Mae and their friends would like to start marketing these illiquid and riskier-than-they-appear securities directly to the general public. They must be running out of bag-holders among Pension Funds and Insurance companies.

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