Yes, who are also underwriters in the same sense: if you sell a man a bag of dog shit each tuesday, you won't see him for very many tuesdays. I simplified for those playing the at-home version, but as a loan goes up the food chain, the risk analysis involved becomes _more_ sophisticated, not less. And whether these folks make or lose money is of no concern here: they are, presumably, consenting professionals.
> Ultimately the risk then is borne by the Treasury (a
> convenient shorthand for you, me and my grandkids).
Speaking of simplification . . . all risk of everything is borne by the Treasury and your grandkids. So? Note that it's only GNMA that acts with the full faith and credit ... the so-called-quasis do not.
We're way off track here: Doug said that taking out a negative amortization adjustable rate mortgage is like going to Vegas (or worse!). He's just plumb wrong. By a lot.
/jordan