On 8/17/07, Julio Huato <[EMAIL PROTECTED]> wrote: > Paul Krugman wrote in today's NYT: > > http://www.truthout.org/docs_2006/081707C.shtml > > > My guess is that [a solution to the > > mortgage mess] would involve federal > > agencies buying mortgages — not the > > securities conjured up from these > > mortgages, but the original loans — > > at a steep discount, then > > renegotiating the terms. But I'm > > happy to listen to better ideas. > > Is this possible? Those mortgages were securitized, pooled, > "tranched" (sliced and diced), and traded. You cannot buy the > underlying asset directly. Can you? >
Of course it is possible, it'd just mean that the MBSes have to be written down to reflect the eventual payout. Indeed that would be a very fair solution i.e. hang the hedge fund speculators out to dry and help the real victim - the homeowner burdened with an unaffordable loan. That is why it will never happen. -raghu.
