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User Info	Gov's next reaction to this mess; entered at 2007-12-02 15:58:09
Gmak Posts: 10179 Registered: 2007-07-27 Re-inventing the future at the speed of time.	They are going to set up a Resolution Trust Corp (RTC) type solution. Debt will be issued to fund it at long term rates. These funds will be used to purchase ARMS and other mortgages (probably at a discount due to the financial distress in the system). The mortgages will be restructured as long term, "affordable" rate loans. The difference in principal (new loan to old loan) and /or difference in rates (new rate versus market rate for the term) will be accumulated in an account attached to the borrowers FOR LIFE. When the owners sell, or pass on, or inherit money, that bill will come due and be paid from the proceeds. If it can't, then that is what RTC will write off. RTC will also be able to sell off these mortgages, just as was done in the old RTC days for the Savings and Loans. (I know there are all sorts of reasons why this wouldn't work. Has that ever stopped a gov't before?). The boomers are set to inherit trillions from their parents over the next decade. Maybe the new inheritance tax will be a confiscation of that inheritance from the parents passing on to pay off the RTC account on the mortgage. If the mortgage system is broke, it has to be restructured and refinanced. The only American entity large enough to do it is the US Gov't. 2007-12-02 15:58:09