January 22, 2009
Dear Sir or Madam:
The mark to market rule is fine for equities, but should never be used for mortgage backed securities. Mortgaged back securities have a value. Their value is the present value of the cash flows with an adjustment downward for estimated bad debt. Mortgages are only worth the cash flows that they generate. They can be worth nothing more or less, to value them at anything other than the present value of the cash flows minus an estimate for bad debt is ludicrous and definately did help to perpetuate the financial decline of the United States of America. If investors had adhered to the true value of the mortgage backed securities, then they would not have been buying them at inflated prices, nor would the people making loans to people who could not afford them been able to keep doing it if the true value of the mortgage backed security was booked.
Please for the financial well being of the United States of America start valuing mortgage back securities at their true value which is the present value of their cash flows less an estimate for bad debt.
If you refuse to value them correctly, please let me know why.
Regards,
Susan Maller
847-309-05