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: saveslivesbyday who wrote (149684)	9/23/2008 10:42:24 PM
From: inchingup	Read Replies (2) of 306849

The bailout from my perspective even if it is marked to market...or how I explained it to my friends using a single home as an example. "X" buys home for $1,000,000. "X" makes no payments on home and bank marks home down to $500,000 and has not foreclosed as of yet. Paulson gives $500,000 of taxpayer money to bank originating loan based on marked to market value. Paulson then sells said loan to a "friend"...let's just call this friend "GS" for $50,000. "GS" then goes to "X" and says you can stay in your home if you are willing and able to make payments on $200,000 loan. (aribtrary figure, they might ask more) "X" is thrilled and says YES! So here are the winners. "X" just rebought his house for 20% of original cost. "GS" makes a 300% profit, plus interest. If homeowner defaults "GS" can likely resell home even at a substantial markdown from $200,000 and make a killing. Paulson then goes out and buys another similar loan from a bank and it is wash, rinse, repeat. Homeowner thrilled, "GS" thrilled. American taxpayer...screwed. Is this how most of you see it?

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