On Mortgages: Beware Henry Paulson?

It seems like whatever Treasury Secretary Henry Paulson says tends to be the exact opposite of what is actually happening. I don't mean any unkindness toward the man. I don't really know much about him. It's just that it seems like every time he makes a prediction or offers an assurance, he's dead wrong -- in 2007, at least, which is when I've started to notice it. Really, it has seemed to me that a shrewd investor could do worse than to listen to Paulson, assume that reality was exactly the opposite, and invest on that basis. I could go back and dig out examples, but I won't bother. I just mean to say that ... well, here. Here's an excerpt from a CNN article published today:

NEW YORK (CNNMoney.com) -- The U.S. government is working hard to give relief to struggling mortgage holders, Treasury Secretary Henry Paulson said Monday. ... Paulson outlined the latest government and industry efforts to help struggling home owners keep their homes. ... He stopped short, however, on providing further details on a plan to freeze mortgage rates .... Part of the difficulty is that these loans have been securitized and sold to investors all over the world, he said. The mortgage servicers are limited in the decisions they may make on behalf of these investors. ... The Treasury Department is leading the effort to streamline the loan modification process, according to Paulson, so that it acts in the best interests of both borrowers and investors. But he stopped short of calling for an interest rate freeze for borrowers with resetting ARMs. Investors in mortgage-backed securities represent one of the most significant barriers to freezing loan rates. The American Securitization Forum (ASF), which represents investors, does not support broad-brush, across-the-board solutions to the subprime ARM crisis. ... Critics say Paulson's outline doesn't go far enough. ... "It's a total joke," said Shea. "It helps. Don't get me wrong. . . .But it's disappointing that we are nearly a year into the crisis and the Treasury Secretary is dealing with the easiest part of the problem."

Here's an excerpt from another CNN item, also posted today, that conveys how one significant investor does see the future of mortgage investments:

NEW YORK (CNNMoney.com) -- In another sign of the collapse of the market for new homes, builder Lennar Corp. has dumped a portfolio of 11,000 properties for 40 percent of their previously-stated book value.

Sooo ... it should continue to get interesting ...