Bob K.

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

JCrash, most of these loans are non recourse loans, which means exactly as you described. You can simply walk away from the debt. The lender only has a claim on the asset, in this case the house. The point the author is making is that if the prime brokers must correctly value their assets on their balance sheets, it significantly impairs their ability to lend, and in some cases their ability to survive. Go ahead and look at the level 3 disclosures and you will see they have more assets they cannot value "read" sell than the capital in their business. That is the reason for all of these bailouts. They could not care less about these home owners.