2009 23
The US Government should retail the mortgage market assets
Published by MartinVarsavsky.net in General with No Comments
Maybe I am the eternal optimist, but I am one of those convinced that the US real estate market is not as bad as the markets that price mortgages think. And now that the US government is seeking buyers for a trillion of those assets going for private equity funds and hedge funds, I wonder this: Why do I have to pay somebody a 20% commission to buy those assets? Why can´t I buy those assets directly? Why doesn´t the US government create securities with, say, face value of $10K each, made of a diversified, countrywide pool of those assets and sell them retail?
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Dani on March 27, 2009 ·
I doubtthe buyers of these securities are expected to collect the debts. When banks securitized and re-sold their CDOs in the past few years, banks didn’t hold the loans, but they still “collected” the payments. Plus, hedge funds and private equity investors will not want to deal with collection at such a small level. They do that when they’re invested in a big corporate loans/bonds, but clearly they’re not going to be knocking on doors of mortgage holders.
Antoin O Lachtnain on March 28, 2009 ·
Well, true, but someone does still need to go and make sure to assert your rights are properly protected by the downstream collectors. This isn’t literally going house-to-house, but if you don’t keep chasing all these banks (many of which are going to be in their own financial trouble and undergoing their own restructurings) you won’t get your money back.
Avery on March 31, 2009 ·
I do not think anyone will buy the mortgage market assets
Antoin O Lachtnain on March 31, 2009 ·
The way the US government has structured them, they are a one-way bet. You can’t really lose money on ’em.
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Antoin O Lachtnain on March 24, 2009 ·
I think the issue is that the purchaser of the assets is expected to ‘manage’ (i.e., collect) on the debts.
I have no doubt that you would be more than capable of doing this, but it might not suit retail investors generally.
I am going by what I read at http://www.irisheconomy.ie/index.php/2009/03/23/why-should-geithners-auctions-work/