SAVE THE TAXPAYER SOME MONEY AND CUT OUT THE MIDDLE MAN

Just a thought. Cut out the middle man. Investors are buying up distressed mortgages at a steep discount. They restructure the loan with the homeowner at a lower amount. So far, so good. Next, they turn around and sell the loans to the government, making a profit and losing the exposure of holding the paper on loans that are still high risk. Now, we get to carry all of the liability.

Since the government is paying for this in the end anyway, why not cut out the middle man? Why doesn't the government just buy the distressed loans from the banks like the wise guys from Wall Street are doing? It would still have the exposure to risky loans but at a lower price. Could it be that this is just another scam designed to benefit the usual suspects? You be the judge.

"Not surprisingly, one of the biggest beneficiaries of the housing meltdown's aftermath is Wall Street. Investment funds are gobbling up distressed mortgages on the cheap, reducing the size of the loans to ease the borrowers' burden, then selling the loans to government agencies at a profit. These so-called "vulture funds," while helping strapped homeowners save money, are shifting all of the risk of the mortgages to the US taxpayer through the agency guarantee when they sell the loans. With the FHA's reserves already below the regulatory minimum and both FHA lending volume and delinquency rates mushrooming, there could be another taxpayer-funded bailout ahead."

CNBS