Interesting - in my speak - just taxpayers potentially bailing out...the banksters (again)
Government buys up - the shite underwater mortgages - restructures and writes off some of the debt.....so the householer can afford the reduced restructured debt
(&....the banks get rid of shite loans off their balance sheets....and who picks up the tab for the gov't writing off some of the mortgage debt.....yes - joe public, the taxpayer)
From the FEDy
With more than 11 million homes still “underwater,” the mortgage debt overhang caused by the housing bubble
- remains an impediment to economic growth and a burden on communities across the country.
One possible solution to this problem
- is for state and municipal governments
- to use their eminent domain authority..... to purchase and restructure underwater mortgages.
This novel solution...... is proposed in a new report from the Federal Reserve Bank of New York.
Many analysts agree that .....principal reductions..... are the best way to assist underwater homeowners
(those who owe more on their mortgages than their houses are worth).
Such write-downs can be difficult to achieve, however,
- when..... the underlying mortgages are securitized and held by private-label securitization trusts. Specifically, such loans are subject to pooling and servicing agreements that require collective action by a large majority of security holders before a loan can be modified.
- As a result, ......carrying out write-downs is challenging and sometimes impossible.
In “Paying Paul and Robbing No One: An Eminent Domain Solution for Underwater Mortgage Debt,” author Robert Hockett argues that one possible way to sidestep this problem is
- by having governments buy
- and ..restructure ..underwater mortgages.
(By utilizing their eminent domain authority, state and municipal governments could bypass the coordination problems posed by the pooling and servicing agreements).
They could then... reduce the principal.... on underwater loans,
- lowering the amount.... owed by borrowers
and thereby reducing the risk of default.
http://www.zerohedge.com/news/2013-06-11/eminent-domain-back-table-following-feds-latest-bailout-proposal
(& the taxpayer - picks up the tab.... as a result of the "lowering the amount.... owed by borrowers" & the banksters offload yet more of their shite - once again
- but they phrase it much more... succinctly...than I)