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Down in the tranches


It's almost like things were set up so homeowners could NEVER be rescued... From the invaluable McClatchy's Most Recently Answered Questions on the economy:

Q: In regards to the recent new plan to help out homeowners with Fannie and Freddie secured loans .. how would one tell which loans are secured by either one of them. thanks.
Submitted by ti hon from garden grove, ca

A: The loan servicer, the company who collects your payment, knows this answer but often won't tell you. I'd call and ask, but they may tell you to write and formally ask for this information. It's one of the many ways servicers have not acted in good faith with homeowners. Their interest lies with the trustee that answers to the investors in the complex mortgage backed security and not the homeowner. There were many ways in which the entire mortgage process has put the homeowner at the back of the line.

Answered 11/13/08 12:35:24 by Kevin Hall and Tony Pugh

I'm betting, though, that if the mortgage is not secured by Fannie or Freddie, it's a lot hard to figure out the complexity.

And that, in turn, makes the size of the Big Shitpile very hard to figure out.

Which is why we need HOLC, both to help homeowners, and to straighten out the balance sheets for the banks. Right now, thanks to the Bush + Reid + Pelosi + Obama + Paulson bailout bill -- not to mention the two trillion Paulson played on the ponies in addition to the bailout -- all we're doing is pouring water into a bucket that's got a hole in the bottom. Why are we doing that?

And why aren't we helping homeowners? Because it's too complex?

NOTE This house is paid for, and my anxiety is pretty bad, as we see from my episode of the plumbing. I can't even imagine what my anxiety would be like if I could be thrown out on the street. And yet, amazingly, or not, the Democrat Party can give all the help in the world to the infestment bankers, the insurance companies, and maybe General Motors, and yet can't find the time for a comprehensive plan to help homeowners -- when HOLC, a perfectly workable and well attested solution, is on the table. They're relying on the Bush administration to come up with solutions! How fucked is that?

Couldn't Obama work the phones for homeowners? In between the calls he's making to save Joe Lieberman's narrow, pasty ass?

UPDATE Anglachel says the same thing using longer words.

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Submitted by jawbone on

but kept on tickin'.

The Repubs on the committee, Darryl Issa and Bybee (?) were the ones I heard, were definitely aggressive. Issa kept trying to pin Kashkari down, but K managed to take evasive action, dancing around answers, trying to fill time with non-answers. Issa did call him on it. Heard tailend of Kucinich also calling K on his lack of transparency.

Issa gave K no rest. I didn't catch everything, being in and out, but it may be on C-Span over the weekend.

Issa continued strong questioning of second panel, mostly people who thought Treasury could have done things differently (and better.) A guy from Litton (sp?), a mortgage servicing firm, was asked to explain where a check from an insurance company paying out for a house destroyed by fire would go given all the tranche problems. It would go to whomever was the receiver on record of the mortgage payments. So, said Issa, why would it be so difficult to use the same mechanism for sending lower payments? Etc, etc. Yes, hard to find the holders of little bits of the mortgage, but some company, some bank receives the monthly payments. Until the mortgage holder can't pay any longer, of course.

Kashkari said Treasury couldn't get into mortgage reduction efforts bcz it was only authorized to give money to banks on the premise that they would get paid back somehow--which was not the premise for mortgage adjustments. Or something like that.

Repubs are setting themselves up as the defenders of the little guy--just you watch for it. The Paulson Fix is going to be hung around Dem necks, including Obama's.

Kucinich was strong in his questioning when I watched him briefly, but I felt some Dems were pulling punches bcz they don't know what Obama will do. That is based on a gut feeling (and innate skepticism).