I've read all the comments ... and truthfully, I was educated a long time ago with the ARMY that if I had a complaint ... come up with a solution, Complaining SOLVES nothing ... SUGGEST a SOLUTION. The solution may not be and doesn't have to be perfect, but it's a starting point.
It's not a bad plan. First, the trouble with the Collateralized Debt Obligations (CDO) and Structured Investment Vehicle SIVs is they're not liquid ... yet, they were created as a basket dresed up to reduce risk and to provide liquidity ( Ha, ha! ) Now, 30% of the homes have NO mortgage. Yet, those properties are TAXED on the appraised value, which is declining ... yet those TAXES PAY for your children's education, the police and fire depts that protect you, your family, friends, and property, etc. So, we ALL have a vested interest in the outcome of CDOs and SIVs that we're talking about on the 70% that do.
Let's look at the other banks, that have SOLD those CDOs and SIVs for PENNIES on the dollar ... because 1 - 3 % of those mortgage's may fail ??? Now some HEDGE FUND stands to rake in BILLIONS on the difference between the 95 - 97% that will go the distance and the pittance they paid. WHY ?????
This disaster has come about for 2 primary reasons:
First, banks got greedy when they realized the fees based bonaza: closing costs, etc, and lowered standards to collect more fees. Second, the government's Accounting Standards ... requiring "mark to the market" the Grand Prize for arrogance and stupidity ... ' cuz how do you mark a 30 year mortgage to the market? You need a serious invasion of privacy. You need to know second to second, if the owner is employed. You need to know from the employer if that'll be for the next 5 seconds, minutes, years ...? So, the government and the banks need to sit down and determine appropriate Nationwide Standards for loans and how those loans will be valued from initiation to maturity, without the invasion of privacy. Once you have "THE STANDARD" you can check how many existing mortgages pass the test and value them accordingly. On the mortgages that don't pass the test, you then need to check why. If it was fraud, then the responsible party needs to be held accountable. If it wasn't fraud, that will probably lead you to bundling 3 - 5% of the risky - probable mortgages together into a pool that ALL banks should share in. PROBLEM SOLVED.