If mortgage paper was trading for much less than face value why not allow people to buy their debt back? Thereby creating increased demand for the "worthless assets"; at the very least it would have created a pretty solid floor for the value of these types of investments.
It also would've helped the freefalling house values because it would have given underwater homeowners a chance to be part of the solution rather than part of the problem.
We all ended up buying the debt back anyway, we just used the federal government to do it.
It also would've helped the freefalling house values because it would have given underwater homeowners a chance to be part of the solution rather than part of the problem.
We all ended up buying the debt back anyway, we just used the federal government to do it.