Friday, April 20, 2007

Subprime Mortgage Bailout: Windfall to Lawyers

Christmas comes early to the legal profession if the government-sponsored bailouts by Fannie Mae and Freddie Mac proceed.

From CNN/Money:

"Tax regulations make it difficult to rewrite the terms of securitized loans. . . . To cover its responsibilities, the servicer would probably want to clear the details of each case through counsel, which can take lots of billable hours, and wait until the loan is in arrears by 60 days or more. The delay often means the borrower gets deeper in debt."

The IRS and lawyers are involved, so what could go wrong?

Hat Tip: Matt's comment at The Housing Bubble

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