[quote=scaredycat]so, uhh, what happened to all those toxic mortgages?[/quote]
IMHO, some have been sold off in bulk, some have been foreclosed and auctioned to flippers or back to bene and put on the open market. Many have been refi’d into GSE and FHA loans (foreclosures coming soon to a neighborhood near you — but now the taxpayers are explicitly on the hook). Some have been modified with much lower interest rates and some with reduced principal balances.
Last but not least, I believe some are still sitting there on various balance sheets getting worse day by day, but they are not being written-down because the current echo bubble is masking the real prices of the collateral, and if they are in the process of being modified they might not have to be written down (anyone have any definite info on that?).
