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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (109157)3/11/2008 7:57:51 PM
From: Smiling Bob of 306849
 
These MBS have been sliced and diced and passed around so many times, they'd need to be dissected and each loan would have to be reassessed on its quality. How do you do that? Find the homeowner and demand they reapply? Who even knows if the original paperwork still exists.

In response to this from your next post
2. They can leave the credit markets locked, no business gets done, and the economy grinds to a halt.

Let the banks work it out. If they want to make money off loans, they'll need to lend. Are you suggesting they don't have the wherewithal to determine risk and make loans anymore and therefore the Fed has to step in and remove the risk and supply the funds? Then they shouldn't be in the business.

Here's a good question. Knowing what you know about the RE implosion, would you buy a MBS -of indeterminable value-or hold it for collateral on a loan? If not, why should YOUR govt?

Heading home.
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