Thornburg Borrowers Unite is a new blog for people with mortgages from now-bankrupt Thornburg. Those mortgages are for sale, at a discount: why can't the homeowners themselves buy them back? "If Thornburg can be persuaded to give its borrowers right of first refusal," goes the argument, "it costs taxpayers nothing, and it prevents third parties from profiting from our losses and the demise of Thornburg."
This suggests an improvement on the housingdefaultswap.com idea. If you buy my toxic mortgage and I buy your toxic mortgage, and we agree to go out and set the accompanying paperwork on fire on the front lawn, neither of us has to go through the hassle of moving. Plus, given that the legal fees associated with foreclosure are built into the price of toxic securities, we can do even better than simply forgiving each other's loan -- we can get paid like lawyers for the priveledge.
Who knew that the US could turn into Atlantis?
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