[Parley Baer]

The way I understand it is the basic Paulson plan would have the Federal government buy up the 5% of the mortgages that are bad. That is where the $700 billion number comes from. So then the Feds would be in the mortgage business until the collect the revenue from them.

It is also quite possible that a lot of those mortgages could become good and the Feds could sell them for a profit. It is entirely possible to recover the whole $700 billion over time and maybe even a small profit could be had.

[yldstrk]

Parley that is a frickin pipe dream there.

[abigailsmybaby]

And then maybe not...especially with the group of douche bags that are in congress now.

[ConservativeMind]

How do we know we are buying the mortgages at a substantially-reduced price?

Answer: We don't. We are just given a bunch of terrible loans, already in default, without a huge discount to the amount remaining on them.

[org.whodat]

It is not about the mortgages, it is about the worthless paper bought and sold on wall street and the so called CDS business where no one knows where the money went, but they want the tax payer on the hook for all the fraud, CDS is nothing more than a device to hedge the bet against a loss. It is fraud. They lost let them pay up.

[Revel]

“It is also quite possible that a lot of those mortgages could become good and the Feds could sell them for a profit. It is entirely possible to recover the whole $700 billion over time and maybe even a small profit could be had.”

These MBS’s are already full of defaulted mortgages. How can they become good? I wish I could find the charts I have seen somewhere showing the defaults in the actual packages. They are high. Here are some links with information.

http://mrmortgage.ml-implode.com/

Older stuff
http://mrmortgage.typepad.com/blog/

Here is a treasure trove of videos
http://www.tickerforum.org/cgi-ticker/akcs-www?forum=Presentations&page=2
Mr Mortgage is Hedgefundmanip for the videos.
Genesis is Karl Denninger