Help me understand the bailout. (who owns the houses now?)

[AZSlacker]

Ok, so if the bailout goes through relatively unchanged, who owns the foreclosed houses now? The people who took out loans out are now out of a home, and the fed is going to presumably reimburse the banks for the loans they made for the houses... so what happens to those foreclosed houses now? Do the banks own them? If the banks own them, and they can re-sell them, what happens to the money they get when they re-sell them? Do they have to re-pay the fed? Do they get to keep the money? If they do keep the money, didn't they essentially get paid twice for one house? Sorry about all the questions, I'm trying to wrap my mind around the implications of the bailout.

[APPLE_PIE]

1. It doesn't matter --- The houses will be gutted for copper anyhow. n/t

[screembloodymurder]

2. Interesting question.

Maybe there should be a national lottery. Winners get a two-week vacation in the home of their choice. Lots of FL condos, LA, MI ... anywhere you want to go, you now have a place to stay.

[Uben]

3. The treasury will own them

...and will sell the debt on these homes to other entities, presumably at a discounted rate

[dipsydoodle]

5. They won't actually "own" the houses

unless they are 100% mortgages and even then they'll just have a charge registered against them for an amount in US$s.
In time the properties will appreciate in value again and the mortgage as a percentage of its value will diminish.

[AZSlacker]

7. Thanks. That makes sense. Won't it be kind of a shell game then?

If bank A and B both get bailed out and reimbursed by the treasury, and the treasury turns around and sells bank A's house to bank B and bank B's house to bank A at a discounted rate... And they presumably turn around and sell the houses at the "market" rate.. I guess that is great news for the banks, and shitty news for the private citizen. Same as it ever was I suppose, I just wish I guess that rather than the treasury selling the houses back to the banks they'd.. not do that, and sell them to the private citizen at a discounted rate instead.

[Javaman]

8. Yeah, they will sell them to house flippers and so the wicked cycle continues...

I don't know if I should put a :rofl: emoticon or a :cry: emoticon.

may the universe have mercy on our really ignorant souls.

[dysfunctional press]

4. the houses are "owned" by the banks and bond companies that hold the mortgages...

in many cases it's almost impossible to tell who actually owns them.

they would create a federal agency/company (resolution trust) that would assume all of the mortgages in the name of the taxpayers. those houses would presumably be sold to recoup the cost.

my question is this- are we buying the mortgages at FULL price over their life? (principal + 30 years interest) or for the purchase price of the property?

[dipsydoodle]

6. "You" are buying the outsanding capital amount

on the mortgage(s) Interest is only material if there have been defaults and the interest has then been added to the capital amount as a result.

[dkofos]

9. This isn't just about home mortgages. They want to get rid of ALL of their bad debt.