"charging distressed homeowners for help negotiating better loan terms -- a service provided for free or for a nominal fee by many nonprofits. "

From the Washington Post:

"By Renae Merle

Washington Post Staff Writer
Friday, December 26, 2008; A01

A growing industry has emerged to take advantage of the unprecedented wave of foreclosures, charging distressed homeowners for help negotiating better loan terms -- a service provided for free or for a nominal fee by many nonprofits( TOO SAD ).

Such companies charge $500 to $2,500 or more and are drawing the ire of consumer advocates, regulators and lenders, who say many are just the latest version of foreclosure rescue scams and can make it more difficult for homeowners to get help( MORE OF THE SAME GRAFT I SAY HAS LED US INTO THIS MESS ).

"You don't need to go out and hire someone to help you," said Michael Gross, managing director of mortgage servicing for Bank of America. "It is very, at times, frustrating to find a homeowner who has paid a for-profit company $3,000 to $5,000 in an upfront fee, when they could have gotten the same or better assistance free."( TERRIBLE )

Loan modification firms say they are taking up the slack left by unresponsive lenders and overwhelmed nonprofit groups. "Nonprofits are not as efficient( RUBBISH ) as the regular market," said Moose M. Scheib, the head of Michigan-based LoanMod.com, a loan modification firm that charges homeowners $1,500 to help renegotiate their mortgages. "I think the difference is probably more attention( BS ) you get from us."

There do not appear to be federal laws that prohibit charging for this service, several law-enforcement officials and law professors said. Instead the practice is governed by a hodgepodge of state and local laws. Virginia does not appear to restrict its practice, according to the state's consumer services department. Officials with the District's Department of Insurance, Securities and Banking said these companies would fall under statutes covering credit counseling services, and therefore must be registered( ARE THEY ? ).

Maryland has received several complaints and issued an alert in September warning that under its existing laws, loan modification firms cannot charge an upfront fee( GOOD ).

Maryland's Department of Labor, Licensing and Regulation has helped recover at least $10,000 for homeowners who say they were misled( FRAUD ), according to the agency. But the state says the problem is bigger than the fees.

"Once a borrower pays an unscrupulous loss-mitigation consultant and time is wasted, the damage has been done," said Sarah Bloom Raskin, Maryland's commissioner of financial regulation. "While we may be able to recover fees, we can never recover the lost time -- time that the borrower could have used to work out a bona fide loan modification( YET THEY'RE HELPING )."

"We are extremely concerned about the huge proliferation of for-profit companies making a buck on these people," said Laurie Maggiano, senior policy adviser at HUD's Office of Housing. The department has certified 2,300 nonprofit housing counseling agencies across the country, which are required have at least one year of experience( GOOD ) administering a housing counseling program, Maggiano said.

Legal Services of Northern Virginia, a nonprofit group, investigated a case involving U.S. Homeowners Assistance of Irvine, Calif., after a client paid the firm $2,500 for help modifying the loan for her Alexandria home. After receiving the money, the company did not return her calls( IT'S EXTREMELY EFFICIENT ), said Kristi Cahoon, a lawyer with the nonprofit group.

By the time the homeowner, a 75-year-old retired nurse, realized no help was forthcoming, she had fallen behind in her payments and was facing foreclosure, Cahoon said.

U.S. Homeowners Assistance said in an e-mailed statement that the borrower's money could be returned if she requested a refund and a review of her file was conducted.

Clayton Sampson, founder of U.S. Housing Assist of Nevada, which launched in July, said nonprofits provide a great service, but added, "We have a lot of clients that need us."

Sampson said he spent five years at a mortgage brokerage and his contacts have enabled him to customize workout plans for a homeowner's lender. His firm charges a minimum of $2,500, but he said he would return the money if he was unable to help the homeowner.

The pitch companies make varies. But one approach includes paying a company to challenge the legality of a loan -- a process housing experts say can be long and complicated.

Vienna-based Mortgage Analysis and Consulting, for example, charges $150 for a consultation and $250 to $500 for a preliminary audit. If the audit finds problems with the loan document, Mortgage Analysis will refer the borrower to a lawyer( THIS SEEMS BETTER ), who may charge an additional $2,000 retainer. If the lawyer requests a more in-depth audit, Mortgage Analysis charges up to $1,750, which clients can pay in installments.

In several cases, the introduction of a lawyer( THIS COULD WORK ) has helped spur the lender to agree to a better loan modification, said Jose Semidey, the firm's founder.

Semidey, a former real estate broker, said he planned to open a nonprofit firm earlier this year to help homeowners. But, he said, he quickly found himself inundated with distressed homeowners willing to pay for his service.

"I am not in this for the money or to get rich. I see it as a mission and a duty," he said. "And yes, we are a for-profit company, but that only makes [us] do a better job."

Virginia's State Bar is investigating a complaint that Semidey has illegally practiced law( THAT IS A PROBLEM IF YOU'RE GIVING LEGAL ADVICE ). Semidey said he makes clear he is not a lawyer and refers clients to a list of lawyers he has compiled.

One of Semidey's former clients, Edwin Monge, said he became concerned that he would no longer be able to afford the payments on his Woodbridge townhouse after the adjustable interest rate rose and the payments increased. The home's value had tumbled, making it impossible for him to refinance. Monge said he met Semidey through a friend and eventually paid him $7,000, some of which was to be used to pay a lawyer.

"I was blind," Monge said. "I wasted my money, and they lied to me and they didn't tell about the community groups( THAT'S NEGLIGENCE )."

Some of the money eventually was returned. And in the end, with the help of a nonprofit legal group, Monge was able to get into a new loan -- at no cost -- through a Federal Housing Administration program.

Semidey said the process did not work out because Monge could not find a local lawyer to represent him and a large portion of the money was spent on an outside auditor. "He came to our office 10 or 15 times," he said. "We translated for him. We sat with him. . . . You cannot make everyone happy."

He said, "We did not profit from the interaction."

The bottom line is that a lawyer could help in some cases, but they usually give a free consultation on their own. I don't see the need for a middleman. Also, if free services are available, a decent and honest person would say so. See, some things are more important than money.

"We probably will never have enough resources to address the problems as most of us would like to.”

Since Fraud, etc., is second on my list of the causes of this crisis, you can imagine why this irks me. From Bloomberg:

"By Patricia Hurtado

Dec. 21 (Bloomberg) -- The FBI has been forced to shift agents from terror and other crime work to Wall Street investigations including the Bernard Madoff Ponzi scandal, said David Cardona, head of the New York office’s criminal division.

The Federal Bureau of Investigation has had to engage in “triage” in responding to successive frauds( FRAUDS. DO YOU SEE THAT? FRAUDS ) involving subprime mortgages, auction-rate securities and Madoff, who prosecutors said confessed this month to bilking investors out of $50 billion, Cardona said in an interview yesterday.

“We have to work those cases which we think pose the greatest threat,” he said. “In this case, it’s a threat to the financial system and Wall Street ( GOOD MAN ). It’s the same with mortgage fraud( FRAUD. DO YOU SEE THAT? FRAUD ). I’m ramping these squads up.”

Special Agent Rachel Rojas, who once worked on tracing terrorist financing and al-Qaeda, now oversees 15 agents investigating mortgage fraud( FRAUD ), said Cardona, a career agent with 23 years at the bureau who once worked as a New York state accountant. He declined to say how ( IS IT SMART TO ANNOUNCE THIS ? ) many other agents he has reassigned from anti-terror work to financial crimes.

Rojas heads one of two such mortgage-fraud squads that work with federal prosecutors in Brooklyn and Manhattan and other federal agencies, Cardona said. The U.S. Justice Department has created more than 40 mortgage-fraud ( FRAUD ) task forces around the country this year.

To address the rise in criminal investigations related to the subprime crisis and other financial crimes, his office has become more selective on the kinds of cases they’ll take on, Cardona said. They do handle multimillion dollar fraud cases, while referring smaller cases to state prosecutors or to New York Attorney General Andrew Cuomo, Cardona said.( EVERYBODY SHOULD BE HELPING WITH THIS INVESTIGATION )

Big Case Skipped

Even some big cases are left to others now. The FBI didn’t get involved in the investigation of Marc Dreier, a New York lawyer charged Dec. 8 with defrauding ( FRAUD ) hedge funds out of more than $100 million. The Dreier case is being handled by investigators in the U.S. Attorney’s Office in Manhattan.

To save agents time, the New York office has also established Web sites and telephone hotlines for anonymous e-mail complaints and tips about mortgage fraud( FRAUD ) and the Madoff case, Cardona said.

Since he arrived from Miami in May, 2007, Cardona, 52, has overseen 400 agents who handle criminal cases. The New York office covers New York City, Long Island, Westchester and the five counties north of New York City. In addition to the main office, located just north of Wall Street, Cardona oversees five smaller satellite bureaus in Queens, White Plains, Long Island, John F. Kennedy International Airport and Goshen, New York.

FBI’s $6.8 Billion Budget

Under Cardona, the FBI’s New York office has also forged new relationships with regulators and other federal agencies as a means of stretching manpower, he said. His agents are working with the Federal Housing Administration on mortgage fraud ( FRAUD ).

“We’re working to marry our efforts,” he said. “There is tons of stuff out there,” Cardona said. “But we don’t have the resources to chase every collapsed hedge fund or collapsed financial institution,” Cardona said. “We don’t have the expertise or the manpower,” he said( GET THEM HELP ).

According to FBI statistics, the bureau’s budget in fiscal year 2008 was about $6.8 billion. There is no allocation for greater funding in the 2009 budget, he said ( TAKE IT FROM TARP ).

“Realistically, in the era of limited resources, the FBI in New York will strive to use the necessary resources to address the criminal activities we feel are the most important,” he said.

Criminal conduct involves a higher standard of proof to secure a conviction than the civil allegations the U.S. Securities and Exchange Commission may file against a financial institution, so it’s harder to make cases, Cardona said.

‘Market Dynamic’

He cites the bank failure at Washington Mutual -- the largest in U.S. history -- as an example of obstacles the FBI faces in showing if there was criminal wrongdoing.

“You can scratch your head and say, ‘Was there criminality that happened there?’” he said. “How can that collapse? Was that mismanagement? My standard is higher than that. I have to show criminal intent. Sometimes you see a bank failure or a hedge fund collapse, and I have to see is that just a market dynamic or is something else going on( THIS PLEADING STUPIDITY WORKS VERY WELL ).”

The fall in the stock market this year didn’t create the recent surge in financial crimes, Cardona said.

“Mortgage fraud( FRAUD ) was perpetrated in good times, but no one saw it( WHO WAS LOOKING FOR IT? ),” Cardona said. “In bad times, as we are in now, you see the manifestation of the crime problem. It was there, but like the tide going out, you just didn’t see until the margin calls started coming in.”

Madoff, Bear Stearns

The workload of Cardona’s agents this week ran the gamut from an indictment in gangland slayings to working with the SEC to Bernard Madoff’s alleged $50 billion Ponzi scheme. Cardona declined to discuss any details of the Madoff case.

Under Cardona, the office had some recent high-profile white-collar prosecutions this year: in June the FBI teamed up with the SEC and prosecutors in the office of Brooklyn U.S. Attorney Benton Campbell to bring indictments against two former Bear Stearns Cos. hedge fund managers in the first prosecution stemming from a U.S. government probe of last year’s mortgage market collapse.

In September, the same group brought indictments in a second case, against two former Credit Suisse traders accused of fraudulently selling corporate clients more than $1 billion of auction-rate securities linked to subprime mortgages. The defendants in both cases have pleaded not guilty and are scheduled to be tried next year.

While counterterrorism remains a top priority for the office since the terrorist attacks of Sept. 11, 2001, Cardona said he’s also cognizant of the threat white-collar fraud poses to the U.S. economy.

No. 1: Terror

“In New York, No. 1, that is terror but also my area of responsibility is any crime that undermines the confidence in our financial-services industry.” He said. “To me that’s another top threat ( TRUE ).”

“All law enforcement will tell you they’d like more resources,” he said. “We’d like to take some problems and crimes out completely. But there are a lot of cases out there I’d like to spend more time on, but we have to hit the bigger targets. We probably will never have enough resources to address the problems as most of us would like to( THAT'S GREAT ).”

Letting people get away with Fraud, Negligence, Fiduciary Mismanagement, and Collusion, by pleading Stupidity or not being investigated for lack of resources, as in the S & L Crisis, assures us that this problem will be back again before we know it.

"Households and investors may be holding out for better terms, bigger bailouts and for investors to be made whole"

Thomas F. Cooley on Forbes considers mortgage relief efforts:

"According to the most recent data, as many as one in 10 mortgages in the U.S. are delinquent or in foreclosure. The continued decline in housing prices has been exacerbated by the decline in the economy. The housing sector is caught in a continued downward spiral.

Foreclosure is a slow and costly process and represents significant dead weight loss for the economy. Estimates are that the cost of foreclosure is 30% to 35% of the value of a house. Moreover, there are externalities that are associated with properties that do foreclose in that they contaminate the value of neighboring properties. This issue is also critical because reducing losses to default and foreclosure will help stabilize the financial system by reducing the actual losses--and the uncertainty about them--that are passed through the financial system to the holders of the mortgages and mortgage-backed securities. Default losses are concentrated in the "first loss" and mezzanine tranches of collateralized debt obligations, which has made them highly toxic to the financial institutions holding them."

I didn't know that about CDOs.

"Here is the question: Given the attention that has been devoted to the problem of troubled mortgages and the number of programs that have been put forward to address them, why so little impact? The simple answer is that the programs are badly designed.'

How so?

"Some examples: Hope for Homeowners is a Federal Housing Administration program designed to modify existing loans by writing down the principal, offering insurance against further default and introducing shared appreciation on the property. Fannie Mae and Freddie Mac laid out plans for restructuring mortgages that lower payments but extend the term on the loan or involve balloon payments. The Federal Deposit Insurance Corporation (FDIC) has proposed to restructure troubled mortgages by lowering payments, but with no write-down of principal and with a balloon payment due at the end. So far, the response to these programs has been minor. Why?

First, they start with lousy incentives. Both Hope for Homeowners and the FDIC programs are available to homeowners who are delinquent by several months in their payments. If you want to restructure your mortgage, what does this tell you? Stop making payments! Sensibly, most bank restructuring programs require borrowers to show good faith by keeping payments current before they will consider restructuring."

It's not smart. However, wouldn't this incentive theoretically lead to more people taking advantage of the offer?

"Another problem is that restructuring per se is not a great solution. For the most part, it simply kicks the can down the road. Lowering current payments but requiring either a balloon payment or an extended payback term postpones the problem without solving it. Moreover, since it does nothing to address the negative equity of the homeowner, it increases the probability of secondary default if prices or owners' incomes continue to fall. For all of these reasons, owners become essentially like renters, with all of the adverse incentives that may imply."

It's not a great solution, but we're not looking for great here.

"The existing approaches to loan modification do not balance the incentives of the borrowers and the lenders. Shared-appreciation mortgages (which are a component of the FHA plan) do this well. Shared-appreciation restructurings offer a debt for equity swap whereby, in return for modifying the loan, the borrower must give up some of the future appreciation in the value of the property. Designed properly, this would discourage borrowers from seeking modifications if they can continue to pay their mortgage."

This would seem to be a good plan.

"The biggest obstacle to loan modifications by far is securitization--the fact that an estimated 80% of the troubled loans have been sliced and diced and sold to many investors. This gets in the way of servicers who might otherwise be given incentives to modify loans in ways that are in the best interests of society. Existing commercial law allows loan servicers to make only changes that are in the holder's best interest--"not materially adverse to the Owner." The law also says that if a mortgage is in default or in the servicers' opinion close to it, then servicers have no authority to make changes in interest rates, or principal amount, or time of payments."

This is a problem, although people seem to disagree on how big it is. Servicers might have more leeway than many have assumed, and are simply using this problem as a bargaining chip.

"Could Congress pass a law that allowed servicers to modify loans by invoking a standard such as "a good faith effort to advance the collective interests of holders"? Possibly it could, but it may run into the problem that the constitution provides that "Congress shall make no law impairing the obligations of contract."

That's problematic.

"The most important role for public policy is to provide incentives for servicers to restructure and modify loans, to make certain that shared appreciation contracts are part of the policy mix, and to address the legal barriers to modifying securitized loans. It may well be that policy inaction and dithering is the largest barrier to progress to date. Households and investors may be holding out for better terms, bigger bailouts and for investors to be made whole. If so, it is simply because the leadership in Washington has been unable to focus on an unambiguous approach to the problem. In the meantime, neighborhoods collapse."

That's been the real problem. People are waiting for government largess. It's a terrible problem, because, politically, it doesn't look good if the government isn't seen as trying to help homeowners as well as financial concerns. Everybody in this process knows that. That's why there has been no solution. There's no good compromise available as yet. Somebody is going to have to blink.

"Will this be in addition to the $600 billion of purchases announced last week?"

Rolfe Winkler at Option ARMageddon also doesn't like the F/F infusion:

"Ugh. It’s been a week since Ben and Hank announced plans to pump $600 billion into mortgage-backed securities in order to prop up house prices “revitalize” the housing market. Mortgage rates responded by falling below 6%. But that’s not low enough for Hank, so he’s considering a new plan to bring mortgage rates even lower, to 4.5%. According to an item on Journal website:

The Treasury Department is considering a plan to revitalize the U.S. housing market by reducing mortgage rates for new home loans, according to people familiar with the matter.

The plan, which is in the development stages, would use mortgage giants Fannie Mae and Freddie Mac to bring loan rates down as low as 4.5%, a full percentage point lower than the prevailing rates for 30-year fixed mortgages.

Government officials are under pressure to stem foreclosures, which underpin much of the current financial crisis. Treasury has struggled for months to come up with a plan that would ease the market without appearing to bail out homeowners and lenders.

Under the plan, Treasury would buy securities underpinning loans guaranteed by the two mortgage giants, which are temporarily under the control of the government, as well as those guaranteed by the Federal Housing Administration. Fannie and Freddie guarantee a large proportion of all new home loans made in the U.S.

I wonder: How many more hundreds of billions will Treasury spend buying mortgage-backed securities in order to push rates down to 4.5%? Will this be in addition to the $600 billion of purchases announced last week?

I believe that the answer is yes. The FDIC is also doing its bit.

"I understand Paulson’s dilemma: the balance sheets of America’s major banks and financial institutions are getting hammered by falling house prices (and the consequent spike in mortgage delinquencies that falling house prices lead to). And yet, it’s pretty clear to anyone that’s taken a look at the big banks’ balance sheets that they are already beyond repair.

To truly “revitalize” housing we must allow prices to fall so that the market clears. Price-fixing doesn’t work. It didn’t work for Nixon in the 70s and it won’t work with interest rates today."

I see this as a move in political economy, just as Nixon's decision was in the early 70s. I don't agree with their moves, but the FDIC has, in essence, forced their hand. They need to be seen as dealing with the housing problem. As a political move, it might well work, and, economically, I've argued that it's hard to see how it's going to do much. But, again, I basically agree with the post.

"promising that only this will now save the housing market."

Remember this post ( I realize this is for Patty ):

"Tuesday, November 11, 2008

" For a limited time, say up to the end of 2009"

Via Greg Mankiw, a proposal I had thought about:

"Carnegie-Mellon economist Allan Meltzer wants to prop up housing demand:
To address the housing problem, Congress and the administration should take actions that increase the current demand for housing. For a limited time, say up to the end of 2009, allow buyers to use the value of their down-payment (or some part of it) as a tax deduction. Or, reduce the tax rate for qualified buyers who purchase a house between now and January 2010. Or do both. Give the benefit to all home buyers, including those buying a second or third house."

My concern. It will be hellish to get rid of. Pretty soon, all housing payments will be completely deductible.

Now, here's why, from Gerald Prante:

The National Association of Realtors, our favorite lobby here at the Tax Foundation, is pressuring its members to urge Congress to steal on its behalf more from taxpayers. Here's the organization's four-point plan:

NAR has urged Congress to include the following provisions in any future legislation:

• Make the $7500 tax credit available to all purchasers and eliminate the repayment requirement. The credit’s limited availability and required repayment terms have severely limited the credit’s appeal to potential homebuyers. As a result, the credit has not been widely used or proven effective at stimulating sales.
• Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent. New rules for 2009 would significantly reduce the FHA, Fannie Mae and Freddie Mac loan limit from their 2008 levels. Now is not the time to limit the availability of affordable mortgages.
• Get the Emergency Treasury bank relief program back on track by targeting more funds to mortgage relief efforts and increasing efforts to mitigate foreclosures. Don't just give the banks unrestricted cash. Make the program work to improve mortgage and housing markets as it was originally intended.
• Permanently bar banks and banking conglomerates from engaging in real estate brokerage and management. The banks have proven they have enough to do to simply properly manage their current lines of business. Do we really want them to manage on the home buying process? Imagine what could have been the situation now if they already had the added ability to engage in real estate sales.

Of course, back when the first time homebuyer credit was put into place, the Realtors said it would be a boom to the market. Of course, they've been wrong (as has been typical of the organization for about the past five years on just about everything), and now they want more, promising that only this will now save the housing market.

Congress should tell the NAR and its lobbyists to just go home (if they still have one).

Pretty clear.

McCain's Mortgage Buyout Plan: What Is It?

Here's Sen. McCain from the debate last night:

"You know that home values of retirees continues to decline and people are no longer able to afford their mortgage payments. As president of the United States, Alan, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes -- at the diminished value of those homes and let people be able to make those -- be able to make those payments and stay in their homes.

Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy. And we've got to give some trust and confidence back to America.

I know how the do that, my friends. And it's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal. But I know how to get America working again, restore our economy and take care of working Americans. Thank you."

Here are some details about Sen. McCain's mortgage buyback plan he talked about last night:

"The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be restructured to put losses on the books and put homeowners in manageable mortgages. Lenders in these cases must recognize the loss that they’ve already suffered.

The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages, the McCain Resurgence Plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets...

The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion, because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed, by stabilizing mortgages, it will likely be possible to avoid some purposes previously assumed needed in that bill.

The plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government's conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit."

Here was Bernanke yesterday about TARP:

"Second, the $700 billion allocated by the legislation is not an authorization to spend but rather an authorization to purchase financial assets. The Treasury will be a patient investor and will likely hold these assets for an appreciable period of time. Eventually, however, some assets will mature, and the Treasury will choose to sell others to private investors. Financially, in the long run, the taxpayer may come out either ahead or behind in this process; in light of the many uncertainties, no assurances can be given. But the ultimate cost of the program to the taxpayer will certainly be far less than $700 billion."

Here's the NY Times about the McCain plan today:

Under the plan, it added, the Treasury would buy unaffordable mortgages directly from mortgage servicers and, in a reflection of the properties’ diminished values, renegotiate “manageable, fixed-rate mortgages that will keep families in their homes.” Mr. McCain proposes that the roughly $300 billion cost would be covered by the $700 billion bailout law.

That $700 billion total, however, was intended to give the Treasury the means to buy and hold troubled assets from financial institutions that might otherwise fail, so that those assets can be sold when markets recover and the assets regain value. But the McCain summary said that “by stabilizing mortgages, it will likely be possible to avoid some purposes previously assumed needed in that bill.”...

“Is it expensive?” he said of the proposal. “Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”

While the Obama campaign’s reaction indicated that the candidates were in agreement, the mortgage proposal raises a number of administrative questions, given the millions who might seek help. It also raises fairness issues, given the many homeowners who are scrimping in order to continue paying off mortgages based on former market values far higher than their properties’ current worth."

I already said the following about what Bernanke said:

"3) Challenges:

A: We don't know exactly how we're going to purchase these assets or for how much ( But we're smart guys, and, once again, there's oversight )"

So, theoretically, the McCain plan could fit into this, leaving aside the enormous work of identifying whose eligible and negotiating and buying an untold number of mortgages. However, this plan seems to envisage a real loss right at the beginning of it's implementation, thereby violating Bernanke's hold them and sell them rule.

Or am I missing something?