I doubt they’ll get much on the recovery. What is a dead bank worth that owns a bunch of bad mortgages?
The mortgages would also get liquidated by the FDIC at a discount price as well, this will likely kill any equity that could be left over if the fees for all this don’t take the rest. I suppose the good news is that whoever takes over the mortgages will be able to take on short sales and REO action as they’ll own the paper at 50 cents on the dollar.
This entire situation could start playing out more and more. Should be interesting.
