So... what is the difference between getting a 100% mortgage from a lender that owns a foreclosed home and later forecloses on it _again_ and ... rent? Perhaps that the deed changes hands a couple times, lawyers take a cut, and you do the maintenance yourself?

Somewhere along the line capital gains and some other things take the place of rental income taxes?

So who is really benefiting here? Is anyone doing disproportionately well? I presume this isn't an improvement over rental rates - and that houses like this aren't rented frequently anyway so there may not be a fluid rental market? So perhaps we are telling a story of people getting screwed a bit because they are essentially renting when they imagine they are owning, and they thus take better care of the home or overpay? Or are we telling a story of disastrous business practices that are going to drag Countrywide down because it is making paper money on mortgages and then losing it all?

I'd normally bet that the winners are landlords and the loser tenants, but in days of collapsing real estate values, that might not be correct - and this column didn't tell me who is getting the shaft here, though it hinted that it was the tenants.

Can someone clarify?

...who is getting the shaft? we all are getting the shaft; we are reaping the benefits of an aged fiat paper currency; they over printed and now all hell is breaking lose. The money has lost it's value and now the economy no longer works. What is hard to understand?

As to who got screwed if countrywide sold a mortgage to a consumer for $300,000 and got back 275,000 plus payments made - expenses they probably got screwed. Or to be more accurate they took an unwise risk and it caught up with them. The buyer who was foreclosed upon may have gotten screwed if he was lied to about the terms of the mortgage. He may have simply accepted an obligation which it was unwise for him to accept. As to whether he is better or worse off than if he had not purchased and then lost the home, it depends on whether he would have paid more or less in rent for a comparable living arrangement than he paid on his mortgage. As for the new mortgage and the new buyer that is a separate transaction and needs to be judged on its own merits. we won't know the result of the new transaction is for both parties until we can look back and see how the it went. Did the buyer pay a good price in terms of where the market is going? Was he able to hold onto the house long enough to make the expense of the mortgage worth it? Was the mortgager forced to foreclose and sell at a loss again or was the loan profitable?

I think what BenK was saying is that the homeowner who "owns" no equity in his home doesn't really own a home, does he? Hence, he is like a renter; he has living quarters, but no ownership. As for your question, whether it is cheaper to rent or own; it is always cheaper to rent. As for your first question of whether Countrywide comes out in the red after reselling the $300,000 home for $275,000; it all depends on how long they took to resell it; if they turned it over in a couple of months, they still came out ahead, if they ate it for a couple of years, they will need a decade of payments to come out ahead. As for your final question of how to determine whether a new acquisition was wise, I think you answered it quite nicely.