In the most truthful and honest and non-snide way, I don't understand how buying assets backed by mortgages makes the mortgages less likely to foreclose. I can't get my head wrapped around it.
This came up in the comments I last posted about. One of the other commenters posted this link to a Jim Cramer column. Cramer says,
It doesn’t address the real problems of people losing their homes.
Wrong. Declining home prices are the reason owners are either walking away or being forced out. Paulson’s plan puts a stop to the root cause of this: foreclosures. Other housing-related problems, from making mortgage money available to shrinking inventories, are being solved. This plan takes care of the last one.
I just don't see the linkage. It seems like the value of the mortgage should be driving the value of the security, not the other way around.
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