$130 billion cost to cure entire mortgage crisis?

[davelj]

[quote=TheBreeze]This article says that the U.S. has spent or pledged $9.7 trillion on the bailout so far and that amount is enough to pay off 90% of the nation’s mortgages:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

So obviously the OP is on to something. It looks like the Bush administration bailed out a bunch of Bush’s cronies while the whole time saying that they were looking to help out with mortgages. What a crock. I hope that Chimpy MFer ends up in jail.[/quote]

There is a rather large difference between money “pledged” and “spent.” If I lend you $100K backed by a mortgage that you must pay back, that money is “pledged.” If I give you $100K to buy a house and you don’t have to pay me back, that money is “spent.” The government has “pledged” a boatload of money thus far, but hasn’t “spent” a lot of it yet (this will change after the stimulus package is passed – that’s money “spent”). Now we can debate what percentage of the “pledged” money we’ll ever see again – 100%, 90%, 80%, less? But whatever number that is, it’s a far cry from being totally “spent.” (Specifically, the actual number “spent” will be 100% less whatever we get back.) So I think the analogy used here is a bit silly. Again, we can debate the merits of all of these various programs, but let’s at least get the terminology and respective implications straight.

[Eugene]

130 bil seems very conservative.

There were probably 200K houses bought or refinanced during the boom in San Diego County. Each one of these lost, on average, 200K of value. On each house that goes into default, lender will lose additional 50K in lost interest, legal fees, agent commissions (if the house ends up foreclosed), etc. That’s 50 billion of losses in a single county.

[Eugene]

130 bil seems very conservative.

There were probably 200K houses bought or refinanced during the boom in San Diego County. Each one of these lost, on average, 200K of value. On each house that goes into default, lender will lose additional 50K in lost interest, legal fees, agent commissions (if the house ends up foreclosed), etc. That’s 50 billion of losses in a single county.

[Eugene]

130 bil seems very conservative.

There were probably 200K houses bought or refinanced during the boom in San Diego County. Each one of these lost, on average, 200K of value. On each house that goes into default, lender will lose additional 50K in lost interest, legal fees, agent commissions (if the house ends up foreclosed), etc. That’s 50 billion of losses in a single county.

[Eugene]

130 bil seems very conservative.

There were probably 200K houses bought or refinanced during the boom in San Diego County. Each one of these lost, on average, 200K of value. On each house that goes into default, lender will lose additional 50K in lost interest, legal fees, agent commissions (if the house ends up foreclosed), etc. That’s 50 billion of losses in a single county.

[Eugene]

130 bil seems very conservative.

There were probably 200K houses bought or refinanced during the boom in San Diego County. Each one of these lost, on average, 200K of value. On each house that goes into default, lender will lose additional 50K in lost interest, legal fees, agent commissions (if the house ends up foreclosed), etc. That’s 50 billion of losses in a single county.

[Author]

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