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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (29109)	2/23/2003 2:22:06 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 74559

example points, EnergyMan, but I think some holes once a bank originates a loan, they quickly package it, despite its likely shortcomings, and sells it to FannyMae they continue to service the loan for the fee but the fee is absolutely miniscule I hear of 0.2 to 0.3% fees FNM buys the bank's loan, thus retiring the bank's role as creditor, and replacing that role with the FannyMae mindless supervisor Fanny buys the loan mortgage contract we dont have twice the debt Fanny didnt lend the banks money!!! Fanny bought the loans Structured Finance allows recycling of debt, not accumulation of debt, or compounding of debt the process allows pennies to be earned by servicers I stand by my statement your 2X and Y+Y2 are misleading it is more like still X and Y with an EPSILON introduced for loan servicing (epsilon is used by math types to represent tiny numbers) as for the income example, fine some colossal losses might enable the debt to income to be astronomical for those unfortunate people who lost tons and earned ordinary income in year 2000, my ratio was minus 15 / jim