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Politics : Sioux Nation
DJT 14.53-1.8%Jan 23 9:30 AM EST
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To: cirrus who wrote (160476)2/12/2009 9:18:24 AM
From: Travis_Bickle3 Recommendations  Read Replies (2) of 362578
 
You are talking about whole mortgages. Most lenders don't hold whole mortgages anymore. The loans are packaged into securities and sold. To further complicate things, the securitized loans are sliced and diced ... some people buy the income only part of them, some the principal, and those pieces are sliced and diced even more into a bunch of tranches, with some tranches having to be made whole before lower tranches see a single penny ... usually the financial institution that packaged and sold the deal winds up with the pieces nobody is willing to buy .. so those assets are, in fact, totally worthless ... some of them are worth even less than zero cause they carry an obligation to make other tranches whole (i.e. they are liabilities not assets) ... hence the term "toxic assets" ... this is why it was possible to make enormous sums of money shorting these companies.
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