The biggest problem is within your question. Rarely is a single mortgage ever sold. The mortgage paper is sold in bundles. They compile good or low risk solid mortgages with bad or high risk ones. If they were treated and sold individually the impact of defaulted mortgages would be much less. When you bundle up these mortgages, you are hiding the risk and horrible ones amongst the good ones, but that at the same time devalues, and cheapens the good ones. When you have too much of a percentage of bad mortgages within a package of good ones that risk cannot sustain the good ones when the bad ones fail. The value of the package, or asset goes down greatly, and eventually when enough fail, these packages no longer are even considered a worthy asset. Another problem is "banking", or regulation rules. The rules basically in a simplified form say that Bank X has assets that we call A. Bank Y has assets that are similar to Bank X's A. Bank Y took too much of a bigger risk, could no longer function, and had to sell to stay afloat, which is basically selling their assets. In order to sell quickly, or find someone who would buy, Bank Y had to sell for 30 % of the value of what the paper said their assests were worth. Now, because of the "regulations", or banking rules, all other banks or thrifts, including Bank X's A assets are now worth only 30 % of what they were before the sale of Bank Y. This forms a snowball effect amongst other banking institions, and then that snowballs into the consumers, which forms panic, which then causes massive withdrawls, which then causes massive failure, and soon a real bad recession. Screw politicizing the failures and bailout. Bailout only what is neccessary to maintain short-term continuity, fix and or change rules quickly to help other banking assets hold their value, maintain available credit to those worthy so the basics of the economy can keep moving, shut down panic, and show some F'n leadership by explaining and stating what is truely happening rather than talking out your lame ass mouth stating whatever the political winds sound good enough to get you elected.

True leaders? There isn't one standing right now who hopes to be president. What there is, is a Republican, and a Democrat, being, well, a Republican and a Democrat in search of votes to get to the presidency rather than showing some F'ing leadership, regardless of politics. The political winds of change have shifted direction and are blowing back the winds of politics of party.