Let the IRS collect the mortgage payments!
Who will really get the $700billion? which we all know will turn into several trillion before its over.
The Elder Bush used the term Voodoo Economics to describe Ronald Reagan's policies (Reaganomics) and now its back in real life with George Dubya.
There is really a simple way to handle the mortgage securities meltdown that doesn't involve complicated back room deals that leave the architects of disaster walking away with billions in their pockets.
If the U.S. Federal Government is intent on paying for all these mortgages why not simply let the government buy them outright? Each block of mortgages could be evaluated and given a fair market value which would range from a few cents on the dollar to full value. The holder of the notes would be paid based on that valuation and the government would then take over servicing those mortgages. The obvious mortgage servicer is the IRS. The IRS already knows where everyone lives and has a long history of collecting and accounting for debts. The U.S. Treasury would be assured of receiving the collected payments and the interest that comes along with those payments. Delinquencies would probably decrease, who wants the IRS dunning them for a late mortgage payment?
This is a simple solution that would allow the Federal Government to actually get something for all the billions - trillions that are about to be spent. The U.S. public would actually know what had been bought and at what price. Money would be returned to the treasury with interest and there would be no middle men and no tricky derivatives and other fancy, meaningless and worthless financing and securities scams.
Why not come up with something this simple that can work and pay the money back?