Friday, February 01, 2008

Fresh Hot Defaulting Mortgages Served



I'd laugh at this ... if it weren't so painful to imagine actually happening.

CNN/Money: New Subprime Bailout on the Table

It appears that Senator Chris Dodd has thrown out an idea to form some sort of government-sponsored entity whose purpose would be to purchase "... mortgage securities that are backed by at-risk, subprime loans from lenders and investors."

Excellent idea! Spend taxpayer money on high-risk, high-default investment vehicles that NOBODY ELSE in the world will touch. Brilliant.

More from the article:

According to today's testimony, the fund might require $20 billion to $25 billion in seed money from taxpayers and, after that, it should self-fund.


And our elected officials are never wrong about programs that will "eventually pay for themselves," right?

Pollock also conceded that the program is not without flaws. It could reward some people who bought more home than they could afford, while leaving more responsible borrowers unaided.


Could?

Might some of these people be tempted to stop making mortgage payments for a couple of months in order to get a government-sponsored cheaper loan?

"You're going to have some people going into default to get into the government program. That's part of the cost you have to reckon with," he said.


Oh well. It all seems pretty clear to me at this point: Taxpayers and savers are gonna get to foot the bill for this mortgage mess ... one way or another.

Say it with me again, kids:

Privatize the profits; socialize the risks.

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— Posted by Michael @ 10:05 AM








2 Comments:
 

I was just talking to my wife about the same thing. The tax payers will to foot the bill for this mortgage mess. Just like the savings and loan bailout years ago.

 

"Say it with me again, kids:
Privatize the profits; socialize the risks."

Get with it. It's the new American way, along with not knowing that buying a $750,000 house with an income of $20,000 a year is not a good idea.

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