PatientRenter – do you really think that there will be any significant relief for the homeowners? The profits were taken out by the mortgage brokers, the Realtors, etc. The banks are somewhat holding the bag (except isn’t most of the exposure in the hedge funds?).
I’m no expert but it seems that with the new paradigm (and I use the word paradigm incorrectly, but its a cool word) of making the sale, selling the loan, then repackaging the loan into a financial product, then resell it in the secondary and tertiary markets – that the owner of the mortgage doesn’t have any recourse other than forgiveness.
I’m pretty sure that with a softening economy (for everyone who actually does the work) that these folks wouldn’t keep the houses even if the rates went up to non-subprime numbers.
What entity will bail out the homeowners who took loans that they couldn’t and shouldn’t of taken in the first place? Don’t get me wrong – I am very pained at their plight. Even in a non-bait and switch situation (the norm, not the rarity) these are not financially sophisticated people.
