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Open Letter To The Treasury: Use The Short Squeeze In The FN/FH 5s/5.5s Bonds To Support An “Auto-ReFinance” Program
“A Missed Opportunity ?” An Open Letter to the Treasury VI by Harley Bassman of the BAS/ML Trading Desk
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Ideas like this make me fucking sick. Just what we need, more government manipulation of the markets.
ghost,
a question for you as the mortgage expert. In a standard servicer agreement, is the servicer likely to collect default fees off the top before paying off a noteholder when a loand goes into default/foreclosure?
Yes.
wtf do people who own / live in houses have anything to this issue ?? honestly.
who ever said this plan had anything to do with actual housing ??
oh, so you do understand that this 'plan' has / had nothing to do with actual housing.
a great note / idea. too bad it doesn't end with a point; like thanking the government for not helping actual housing in favor of fictitious & frivolous frivolent finance.
p.s. such a shame that 'the bull' moniker be gone, though it is apt.
Excellent and right on the mark. Been singing the blues over this for months. Good job Harley. THe Fed mbs program has been a dud and a waste of Federal Reserve good will.
A related point that Harley did not point out. The GSE are currently sitting on approximately 150-200bb of non performing mortgages that receive no interest or principal from the homeowner but they are required to forward those scheduled interest and principla payments to the MBS holders. However, once these loans become 120 days past due, the GSE have the OPTION to buy these loans out from the MBS pool and stop forwarding P+I to the MBS holders. Since most of these delinquent loans back MBS pools with coupons over 6% and prices well above par, they are leaving TONS of taxpayer money ((we do own these guys) on the table (6-8 bb per year) because they stopped buying out loans early last year due to capital issues. This is the dumbest thing ever in that they can issue discount notes at close to zero percent and avoid having to forward above market interest rates to the MBS holders. Another huge wealth transfer from taxpayers to bond holders -- and yes, due to accounting changes FASB 167/166 they can mark the delinquent loans at par until they are disposed of.
OBAMA/BERNANKE/Little G - are you listening?
To Treasury, OTS, Obama, Geithner, Bair, Bernanke
Hi. My name is Joy Schmidt and I live in Northern California in a suburb east of San Francisco. I have never been a fighter, or a political activist or an advocate for victims. But you hurt families and take their shelter, strip their hope, deprive them of their sense of well-being, rob them of their life savings, and pillage and plunder their safe haven.....well, there is going to be a backlash. So watch out Aurora. We are joining forces and telling our stories - our nightmares, our plights, our struggles, our ordeals - and we will reveal the web of lies that we were told by you over and over again as we vigorously attempted to work toward your imaginary loan modification. But while we were jumping through your hoops, meeting all of your demands, making our monthly payments, you were marching toward foreclosure and designing your game plan to rob us of our homes on court house steps. Watch out Aurora, We're MAD AS HELL AND WE'RE NOT GOING TO TAKE IT ANY MORE.
http://www.auroraloanvictims.com/Aurora_ClassAction.html
MBS liquidation as a means to generate revenue requires buyers. A spread is not conversion. Structured finance in this example, cannot be priced. The MBS buy was to protect the GSEs and BHCs. The notion of hedging against deflation is inconsistant with the magnitude of bad debt.
Mark Beck