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$4 Billion Golden Oppoerunity

U.S. Mortgage Crisis Act II, Securitization Meets Loan Notes

Housing-Market / US Housing Oct 19, 2010 - 03:41 PM GMT

By: Mark_B_Rasmussen


This is an $11 Trillion market.  Apx. 42 million mortgages were created from 2003 – 2009.  Was Sub-Prime a light shower?

Inquiring minds want to know.

  1. How many warranties compel the packagers and sellers of these MBS’s to repurchase them and how many and how much is that?  Do they have the money?  What are the borrowing costs with this toxic waste on the balance sheets?  Stock dilution through capital raising?  Reserves?
  2. Do the packagers/sellers of these MBS’s make the payments on these MBS’s even if the borrowers stop paying?  Can they?
  3. Do the owners of the MBS’s sui the packagers/sellers and how many and how much is that?
  4. How well does the new SEIU (Service Employees International Union) “Where’s the note” campaign work? (Just getting started). 
  5. What are the affects on the portfolios of the countless underfunded pensions (modeling 8% returns), insurance companies, municipalities, states and sovereign countries?
  6. How much will the fines be, assessed by the 50 attorneys general (from broke and desperate states) going to add up to at $10,000 - $25,000 per infraction?  They have all filed lawsuits.   11. What are the values of these impaired (limbo) mortgages and how are they accounted for by the institutions?  More mark to “Make Believe and Myth” or Market.

     7. The 4 “too big to fail” banks are much larger than they were when “too big to fail” started (55% of total bank assets).  Now what?  The FDIC is hemorrhaging red ink with 294 seized banks so far.

     8. How many people get free houses?

     9. How many former owners, that lost their homes through fraudulent foreclosure, file an action to set aside the foreclosure and get their houses back?  What happens to the new owner?

    10. How long and how much money is it going to cost to clear this up?

    11. How many lawsuits by how many parties, civil judgments (actual and punitive damages) is this going to result in?

    12. How long is it going to take to clear the litigation? An elephant through a python!

    13.  What is the impact on the credibility and confidence of the U.S. financial system?  Figures don’t lie but liars figure.

    14. Does the Federal Reserve purchase the trillions of dollars of foreign owned MBS’s to make foreign investors whole? (like last year, only much bigger).  With what money?  Got Gold or Silver?

    14. Will there be any investigations, indictments or prosecutions this time?

    15. Are we going to socialize the losses again?

By Mark B. Rasmussen

Mark is a real estate appraiser/broker by profession

Copyright © 2010 Mark B. Rasmussen

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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