Mortgage stamps

A few weeks ago, I read a waggish comment somewhere in blogland regarding The Big Shitpile (aka, the subprime mortgage mess). The commenter jokingly suggested the creation of “mortgage stamps” to help out struggling homeowners. Well now.

Merrill Lynch senior director Sarbashis Ghosh, in a session on RMBS research: “It’s not a subprime problem, it’s a housing leverage problem … we have people with a mortgage who simply cannot afford to make their payments.” Ghosh suggested the solution was “to address the question of leverage,” and went so far as to suggest something like a food stamp program to help borrowers with payments. [emph added]

Ghosh made this statement at the 2008 American Securitization Forum, a conference for securitization market professionals from all asset classes and product sectors that is now wrapping up in (ahem) Las Vegas.