A question about the current economic brouhaha

[felis_sidus]

This may be a dumb question, and it may even evince a complete lack of understanding of the issues. If so, then please answer it seriously anyway because I need to learn something

Comments

[xiphias]

Truth is, I have no clue whether that makes sense or not.

And I'm not entirely convinced that anyone else does, either.

The way I understand it, the real problem here is that people got suckered into loans they can't afford. Give folks who got suckered a chunk of money, and they still won't be able to afford the loans.

The better idea, I guess (but don't know for sure), would be to go to those folks and re-work the loans so that they were fair, and people could pay 'em. And then the people who held the mortgages would still be getting some money.

But I understand that part of the problem is that, for most of the mortgages, nobody really knows, and nobody really can tell, who actually owns them. Because they were sold in huge bunches, but in shares. So this bank would get 2% of these 1000 mortages, and that insurance company would get 5% of these 250 mortgages, and so forth.

And so nobody really knows who owns what, so nobody can really tell who you are supposed to deal WITH to restructure the loans.

[xiphias]

Oh -- come to think about it -- maybe that last bit is the reason for the bailout in the first place. If the government buys up all the bad mortages . . . well, then, at least we'll KNOW who owns 'em . . .

[felis_sidus]

The better idea, I guess (but don't know for sure), would be to go to those folks and re-work the loans so that they were fair, and people could pay 'em.Agreed. That's pretty much where I was going with the idea of helping homeowners to get new mortgages that they actually could pay