Originally Posted by dopeman

you're assuming the banks are holding those mortgages. they don't. Fannie Mae and Freddie Mac hold most mortgages. they repackage all the interest and principle payments people send them into bonds - bonds that are held by many retirement / pension portfolios. not to mention, there's some sort of agreement that the u.s. treasury will bail these two out of they get into trouble. they hold almost 2 trillion dollars in debt - not to mention the many many trillions of off book derivatives they wouldn't be able to service either. it would sink our economy - and the global economy.