The BIG Bailout

[ArtWilliams]

Yes. Essentially, the mortgage (which has been changed into a security) is swapped (with a paper contract). If the mortgage is defaulted then the holder of the swap contract would enforce it on the third party holding it.

Originally Posted by Cleo

So does this mean that if these securities that the government was bailing out do default then trillions of dollars in Credit Default Swap contracts will become due?