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An idea for how to deal with second liens

By Felix Salmon

I had a long conversation with Jesse Eisinger today on the subject of second liens and the proposed mortgage settlement from the state attorneys general. Second liens are clearly causing a huge problem in both the mortgage market and the banking market, as Mike Konczal clearly explains. They’re being held on banks’ books at what looks like extremely inflated values, and those banks are also overwhelmingly the entities servicing first-lien mortgages. As such, the banks are quite happy read more

Full post as published by Macroprudential on March 22, 2011 (boomark / email).