Mortgage Meltdown? Foreclosure Fiasco? Either way, I’m hooked.

I enjoy a good crisis. Miners trapped underground? Count me in. Miners rescued in good shape and ahead of schedule? Snooze.

The current rumbling from Under the Border foreshadows a doozy of a crisis. The mainstream media have only just begun to cover this US foreclosure fracas, but it's been the topic du jour for plusieurs jours now amongst the lesser affiliates of the financial cognoscenti.

There are more explanations of this foreclosure fuss than you can shake a rolled-up title deed at. I'll add to the heap with the simplest -- and quite possibly misleading -- summary I can muster:

1. You buy a house that you can't really afford.
2. The bank bags your mortgage together with a bunch of others and resells the whole wad in confusing ways to investors.
3. Ugly reality forces you to stop making your mortgage payments.
4. The bank forecloses on your house.
5. You challenge the bank to produce the ownership papers for your house.
6. The bank has a person that signs many promises that they have these papers.
   6a. But they don't.
   6b. They lost a bunch in the rush to sign up as many subprime mortgages as they could back in 2007.
7. The company that insures that the title papers for property sales are legitimate now says they won't insure those any more.
8. Who will now buy a house if there's no guarantee that they'll actually own it after they pay for it?

So you see the problem.

There's also the trifling matter that the banks -- and really, there are more institutions involved, but I can spell "bank" -- may have to pay for those mortgage-backed securities they sold in step #2 because of some small print that says they can't lose more than 0.01% of the paperwork for any one security. Apparently, the banks may have lost a lot more than that. And they really can't go looking for the lost paperwork because the tax-friendly terms of the mortgage-backed securities means that they'd fork over a hefty tax penalty if they did. The price tag is still being worked out, but the entire market is a colon-clenching 2.6 trillion dollars.

Then come the lawyers.

If you want a much more thorough, and yet easy to grasp, telling of the sordid tale of the foreclosure follies, I encourage you to read this five-part series.

Git that popcorn a-poppin', this'uns gonna be goooood.