[Dems2008] Govt "baiout" and moratoria re: foreclosures

• I've been active part-time for 19 yrs now in the secondary mortgage market (CDOs and other pass-through securities)
• AND I have to say that it is not at all clear just WHO is/are the  intended beneficiary(ies) of the Treasury Dept's current mortgage plans or the Democratic candidates' proposals:
• COULD BE any or all of the following:  (i) institutions and hedge funds who bought the paper, (ii) insurers and rating agencies who are on the hook  for paper that was over-rated AAA, (iii) hapless and/or fraudulent borrowers, (iv) neighbors like you and me who don't want lots of inventory of unsold foreclosure properties to drive our house values down further, (v) the economy writ large, (vi) lenders who may have over-reached on these so-called NINJA loans.
• There's enough "corporate welfare" on the GOP side to dwarf the sort of welfare that we Democrats have been blamed for over the last 75 years.  And, so, when I hear proposals from either the Dems or the GOP regarding the mortgage loan problems that we face today I'm just never quite sure whose pocket(s) the proposer is intending to line.
• I do know, having worked in the institutional mortgage industry back in the 80s, and having followed this subprime meltdown the last 12 months, that one cannot generalize about what caused this or that mortgage loan to go bad.  For every subprime loan that was taken out by a deadbeat borrower who conned a lender as to income and employment, there is a lender or mortgage who over-reached an unsophisticated borrower in ways that would make a used car salesperson blush, and for every such lender and borrower there is a young couple who did not know (and could not have known) that one or the otehr of them would lose a job or suffer a debilitating illness just at the time that the rate would re-set.
• I too (and my children) have only ever had fixed-rate loans, but there are circumstances imaginable where an adjustable-rate loan would not have been an irrational choice.  Not my choice by any means, but not an irrational choice in some settings.

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