The “Hope Now” Mortgage Plan: Where Are The Investors?

One need look no further than the so-called member list of the Hope Now Consortium to realize an important constituency in all this is missing:

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Of the 33 entities on the list, only three are classified as “investors.” In addition, you could easily exclude all of those – the American Securitization Forum is a trade association, not an investor (and is already included as such), and Fannie Mae and Freddie Mac are quasi-governmental agencies that, while they hold and/or “guarantee” a lot of mortgage loans, also derive a significant amount (if not the majority) of their income from packaging and selling debt to others. The majority of members are lenders or “mortgage market participants” – in other words, the folks whose faulty underwriting standards produced the mess in the first place. Then there’s the sprinkling of not-for-profits…I take it so the initiative has the appearance of “do-good-ness.”

Where the heck are the investors?

UPDATE: As Asia-Pacific credit risk grows as a result of the mortgage debacle…

Treasury Secretary Henry Paulson said yesterday he’s confident the government and banks will agree on a plan to fix some subprime mortgage rates before they reset higher and trigger a wave of defaults. A lack of information has created doubts about the proposal, analysts say.

When the people that actually own the mortgage debt aren’t invited to what is potentially the biggest forgive-and-forget party in the history of modern finance, I’d say that’s worthy of a few doubts.

UPDATE 2: Yves Smith notices the same problem.

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