Cheat Sheet
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Wall Street Buys Up Mortgages
Some homeowners are receiving help from a mysterious firm offering discounts on their mortgages. In an unusual relationship between Wall Street and homeowners, investment funds have begun buying home loans at a discounted rate, and passing along the savings. What homeowners don't realize is that these "vulture" funds, as they're known in the industry, are profiting from taking on the loans by refinancing through lenders that work with government agencies such as the Federal Housing Administration, which then sell them as securities to investors. In doing so, these funds shift the risk of the loans to the federal government and, something the American public knows all too well now, taxpayers. “From the systemic point of view, there is something disturbing about investors that had substantial short-term profit in backing toxic loans now swooping down to make another profit on cleaning up that mess,” said a financial industry consultant.
Plantagenet
Now we know why Geithner at Treasury is constantly on the phone with the banksters at Goldman Sachs and other Wall Street banks-----he's giving them inside information on these federal programs how to scam the taxpayer, and they're telling him what they want him and the BOers to do next.
Genni2002
This is gross negligence! Get rid of these lazy, irresponsible WS freeloaders bottom feeders. They don't do anything except cause financial meltdowns on a regular basis. This is not work and it is not contributing anything to society.
Demsdisorder
where is the bman when the cookie jar is being raided???
on the golf course shooting a 112. hope and change?? sure it is
FatFreddy
Very interesting. A while back there was a plan for the government to buy up these toxic assets directly and put them in a "bad bank", to be renegotiated and held on to, and possibly sold at a later date. This plan was scrapped. Now, there's a private firm buying these toxic assets and selling them. Technically, this is the way Capitalism is supposed to work. Bad assets get sold and bought for pennies on the dollar. The problem here, however, is that the government is backing these loans, therefore the discount is less, presumably. If the government had used the "bad bank" scenario, they/we would probably would be on the hook for a lot less, and there would be no third party profiting (rent seekers), on the transactions. Also, if the government had done the "bad bank" thing way back when, there probably would have been less of a need for TARP, and a lot of bank failures probably wouldn't have happened.
Given the current situation, I would say, anything that gets these toxic assets off the balance sheets of these banks, is a good thing. However, it could have been done much more efficiently.
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