I don’t think that there are many institutions that hold these loans. They were sliced and diced into CDO, MBS and sold off on Wall Street to anyone and fund managers that were looking for higher returns.
Is addition rates aren’t 3%. A prime borrower might have been 4-5%, a sub could be 6-8%.. Still not that bad of a return.
There is very little cash value to these today, so they just don’t value them. It’s better to keep it hush hush and get interest payments, with the true lack of value buried.
There are pension managers, life insurance companies, hedge fund managers, city and county treasurers that sre very concerned these days. Some will be out of a job as soon as their losses are exposed.
A bank money market account that is NOT FDIC insured could also have exposure. You own “shares”
Nobody really knows how much is out there, but it will make Enron look like child’s play.
Some of the losses will be buried forever and never get exposed.
The Wall Street folks already took their cut off the top.
