cjct

The Hedge Fund of America, LP

Worst case scenario for Treasury is it buys the MBS's and the homeowners default on the mortages. Even should that occur on a large scale, there is still underlying (although deteriorated) value in the house and the land it sits on. Certainly the government could auction off this property to recover 20-30 cent son the dollar which is basically what the MBS's are likely to be purchased for in the first place.