Quote:
Originally Posted by Mr. Sandman
I don't understand how something less than 10% of the bad mortgages can cause this total collapse of these huge banks.
Also,they write off these as worthless...which they are not. There is a house that is worth something, it is not zero. It may be 20-50% less than a few years ago but it is not zero.
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The issue is that as the loans were lumped together and sold off in a bundle, they don't really know where the risk specifically is.
The government plan looked like it meant to buy blocks of risky loans to take the liability off of the lenders and sort it out themselves.
-spence