FW: The Mark-to-Market Bank Trade This Week

I had to repost this one it gives you some perspective…

Robert Perrego submits:

Currently, there are approximately 45.4 million mortgages on houses, condos and co-ops in the United States. Of this number 11.18% or about 5 million of these mortgages are either in foreclosure or delinquent (at least 1 month behind) on their payments.

The homes in foreclosure are 3.3% or about 1.5 million mortgages. Using these numbers and considering that collateralized mortgage obligations [CMOs] comprise the bulk of the now infamous 'toxic' loans that are cramming up the banks loan portfolios and balance sheets these days, you might think that these bonds should now be valued at between 96.7 cents (3.3% foreclosure) and 88.8 cents (11.18% delinquent) on the dollar. The reality of where these mortgages are being 'valued' at is far different.

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