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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (96382)	12/6/2007 10:05:37 AM
From: Travis_Bickle	Respond to of 306849

To make it really good they should pass a law allowing the servicers a massive surcharge from the mortgage pool for sodomizing the investors.

To: Elroy Jetson who wrote (96382)	12/6/2007 10:15:38 AM
From: Les H	Respond to of 306849

Allow the investor to put the bond back to the issuer if they try to modify the terms.

To: Elroy Jetson who wrote (96382)	12/6/2007 1:12:15 PM
From: ChanceIs	Respond to of 306849

>>>Mike Castle of Delaware has proposed legislation offering a "safe harbor from legal liability" to mortgage servicers.<<< Doesn't that just take the cake. Castle must be a very liberal Republican. For a political muscle standpoint this is understandable. You can get the thirty or so servicers together in one room, and tell them that they are going to freeze rates or else. Its really hard to tell the several million bond holders the same thing and get them to believe. So the small group of servicers say..."OK. We will freeze, but you have to indemnify us when the bondholders sue." How many bondholders do you think were present at the negotiations??? So this makes sense from a pure hard ball politics viewpoint. That doesn't mean I like it. Quite the opposite. Can this deal go down??? Many oil companies have sued the government over what I call "LeaseGate." The late Clinton administration failed to include royalty language in deep Gulf of Mexico leases. When the price of crude went up, the government wanted a piece of the action, but wasn't getting it. The oil companies sued to enforce their contracts and by-in-large won. That doesn't mean that Congress won't try to take what it feels it is owed out of them on the next set of leases. There will be massive litigation over this. Massive, massive, litigation. Its all about who gets what size of the piece of pie. There is no moral basis. Its all political leverage. The government made the first move, now it will see how the system responds. Denying the right to sue!!!!! That is huge. That is a constitutional issue if there ever was one. Congress can't even attempt to implement that inside of six months and hope to get legislation in place inside of one year. The effect of course - as must here understand - will be that credit gets tighter, lending standards increase, and house prices drop further than they would have. All of which makes things much worse.