In Mike Gurstein's forwarded post, the attribution is a little
confusing, hence:
Some Guy opined:
"To repeat: if the chain of title of the note is broken, then the borrower
no longer owes any money on the loan.
[snip]
"People still haven't figured out what all this means. But I'll
tell you: if enough mortgage-paying homeowners realize that they
may be able to get out of their mortgage loans and keep their
houses, scott-free? That's basically a license to halt payments
right now, thank you. That's basically a license to tell the banks
to take a hike.
I think that's just beautiful.
Some Other Guy commented thereon:
If you took out a mortgage and now the title is in some doubt
because the investment banks and mortgage banks and all the middle
guys screwed up (big-time!) because they wanted to save some bucks
and make some commissions, you did not win the lottery. That is
not America as I know it. You can't pay the mortgage, I am
sorry. But you do not get to keep the house. The people who
(thought) they bought the mortgage in a fair deal need to end up
with that mortgage.
In the America I know (well, knew -- I last lived there 40 years ago)
if you screw up, especially if you screw up when perpetrating a fraud,
you and the people who directly benefited from that fraud have to eat
it. If the intended victims get a free lunch into the bargain, that's
cool.
The Other Guy reminds us that corollary to this principle is that it
only applies to civilians. "Investors" (in the sense of the late,
unlamented Multilateral Agreement on Investment) are entitled to a Get
Out of Deep Shit Free card. TINA. [1]
The Other Guy continues:
Now, that is not to say the people who did this stuff did not
commit felonies and such. We can sort that out over time. The
longer we wait the worse it will get. Fix the problem and then go
round up the bad guys. There are bigger issues in play here.
Right. Issue the GOODSF cards, wait till they've taken effect and
then go looking for the culprits? Are you kidding? That would be
hilarious if he weren't seriously proposing it. Another
expert TINA opinion.
Let's be very clear. If we cannot securitize mortgages, there is
no mortgage market. We cannot go back to where lenders warehoused
the notes. It would take a decade to build that infrastructure. In
the meantime, housing prices are devastated. Whatever wealth
effect remains from housing gets worse, and the economy rolls
over.
Hard to say. The casino finance players would get gored. I don't
have a problem with that. Would my local bank, S&L or credit union
keep on doing mortgages on local properties? Would the smaller
financial institutions find a way to stay in business. As The Other
Guy writes, "This is beyond my pay grade" but I'd guess yes.
A week or so ago, Arthur wrote:
Growth for growth's sake is the ideology of the cancer cell
Would we really be worse off if the financial casino, which
unabashedly operates on that ideology, were to hit a wall, were to
enjoy a little chemotherapy? Chemo usually makes the patient pretty
miserable, your hair falls out, you have to take anti-nausea and other
drugs, but with luck it kills the cancer.
Curmugeonly,
- Mike
[1] There Is No Alternative. Of course people in finance would feel
that way.
--
Michael Spencer Nova Scotia, Canada .~.
/V\
[email protected] /( )\
http://home.tallships.ca/mspencer/ ^^-^^
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