In 2005 the homeowner again refinances the mortgage (P) and packages it with other mortgages, notes, and securities in Bundle B which is then sold to Bank R,S,T.
Since the homeowner's current mortgage (P) is in Bundle B at Bank R,S,T, what happended to the old mortgage (N) in Bundle A with Bank X,Y,Z? Does it still exist? It does not. Has the old mortgage been taken off the books or does it still appear in the accounting statements of the bank? This is what is not known.
These kinds of difficulties underscore both the complexity and problematic nature of asset valuation in the rescue plan being considered by Congress and the White House.
Such questions need to be asked, answered, and understood before any plan is rushed through the legislative process.
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