Reply #19: It seems like a pretty factual summary until the end.

[grantcart]

First it should be noted that the poster calls nationalization of the banks 'facism' when clearly it would be a socialist answer.

It was a carefully stated piece up until the end when he said the whole thing was a carefully orchestrated conspiracy for 8 years that would end up in the nationalizing the banks. That just doesn't make sense. Who would come up with a scheme to not make money by having your assets nationalilzed?

I am suspicious that the suits against the banks are likely to be successful simply because if they were perceived to have a good chance of winning bank stocks would have plummeted.

A collapse of foreclosures will mean a collapse of mortgages. Would you want your retirement funds invested in loans that were unsecured?

A collapse of mortgages will mean a collapse of the property market as new purchasers will not be able to buy properties, even if they are financiall solvent to do so.

A collapse of new buyers will mean that the property value of all homes in the US would fall sharply.

The powers to be are not going to let that happen so some type of fix will have to be administered.

Now as for socializing the mortgage market this has been done successfully.

Most people gag when I tell them that Singapore is 'technichally' a socialist country but it is. It has a strange hybrid of very socialist and very capitlist policies.

One of its socialist policies that have worked very well is that since 1968 you have been able to access money from your Central Provident Fund account (their Social Security) in order to buy leases on government housing. Today about 80% of Singapore live in government housing in all different price ranges.

By tying mortgages into their social security funds they are able to guarantee workers in their 20's mortgages for entry level housing.

To make it work you have to have an economy that is at or near 100% employment, but that is another story.

Socializing the mortgage market, like the President did with the student loan market, could be a great advantage to the capitalist part of the housing system because their would be greater stability to the mortgage paper than what currently exists as the OP has shown.

If I was a major builder or a supplier to the building industry right now I would be cheering on some socialist answer to the mortgage system collapse because my future would depend on it. Right now one of America's most important industries that cannot be outsourced is teetering on the edge of systemic collapse.