[brewer12345]

Quote:

Originally Posted by twaddle Yup, I think you've hit on the hitch in the plan. Work-outs involve contract modifications. Massive automated work-outs are unprecedented. It'll be interesting to see how (or if) they actually implement this.

Just guessing, but I don't think the gummint will end up imposing anything on anyone. Remember, we are talking about a republican administration that hates gummint and wanted to privatise SS. And I think Sec'y Paulson is smart enough to know that if you piss in the securitization punchbowl this time, nobody will be willing to get a glass of punch for a long, long time.

What I really think will happen is that the administration is trying to get everyone with a stake at the same table to talk things out. The gummint may nudge things along with an implied threat, but that's about it. What I think Paulson wants to end up with is a set of ground rules that everyine voluntarily agrees with. Right now, banks can modify their own loans at will when it benefits them to do so, but have very little leeway in modifying loans that are securitized, even when it would benefit the investors in the deal. If everyone agrees on ground rules for how securitized loans shouldbe modified if necessary, a lot of defaults will be avoided and a lot will be pushed out several years.