To: "Dhanesvara (das) (ACBSP) (Kiev - UA)" Date: Tuesday, May 12, 2009, 5:01 PM
Here's a letter from Dhanesvara
Thank you for this.
The point we make is that banks have already written down 80% of their securities while the actual real estate value and what homeonwers can afford to pay is closer to 40%. If the bank themselves simply transfers these writedowns to the homeowners by refinancing them at these reduced mortgages, then all the investors will get back 100% of their holdings. Simply take all the write downs the banks themselves have already writen down and pass that on to homeowners and investors holding the securities get 100%.
In short, this thing has already been writeen of by 80% to 200%. Banks will get back about 20% to 40% of their write downs while investors get back 100% and homeowners still get 50% off on their mortgages. Banks are looked at as an individual unit then the investors are looked at as an individual unit and then the homeowners and insurance companies but in each case, they are actually working with the same mortgage from the same real estate and so they have each written off between 25% to 45% so when all combined, they have all been writing off the same loan meaning that the loan has been paid off or written off by between 50% to 200%. Simply refinancing all of today's real estate at even 45% will in fact provide each party a significantly refund. They have to stop looking at each individual group of this real estate process from homeowner and bank to investor and gov't housing programs and look at the entire industry as a whole. Then they will see how much money is just there for the taking. Its all there in the manual. If you know anyone, please pass the word on.
From: Dhanesvara (das) (ACBSP) (Kiev - UA) Subject: this explains a lot
To: "Raghu Michael" Date: Tuesday, May 12, 2009, 2:36 AM
Raghu, check out this article. It explains why banks are not eager to redo
mortgages -- those mortgages are already sliced and diced into securities!
http://www.huffingtonpost.com/2009/05/08/short-sales-banks-blockin_n_199099.
html
"We've been trying to figure out probably for close to two years now why so
few mortgages are being modified when it seems to make absolute business
sense for the person holding the mortgage to modify rather than foreclose or
to take a smaller loss selling it rather than a bigger loss foreclosing on
it," said Rep. Brad Miller (D-N.C.).
Miller points his finger at securitization. Once the mortgages are bundled
and sliced up into different pieces, known as tranches, the owners of the
pieces get paid back according to a certain pecking order. Senior investors
get paid back first and if there's a loss, the most junior investors won't
get anything. It's those investors who are blocking short sales.
"The people with the least senior tranches have no reason to agree to the
modification because they take a complete loss and the people in the most
senior tranches don't lose anything. So they've managed to structure their
mortgages in a way that makes it almost impossible to modify or sell short,"
said Miller.
