Today I have to bring your attention to Twist's post that blew my mind, on housingdoom.com. Read the full post on how the US government is bailing out lenders here.

A little known US government entity, the Federal Home Loan Banks, are lending Countrywide, World Savings and many other thrifts tens of billions of dollars in taxpayer money right now.

Countrywide’s borrowings from the FHL Banks have almost doubled though, rising from $28 billion to $51 billion. The FHLB now accounts for 26% of Countrywide’s funding, up from 15% in December and 2% in 2002, when the firm first started to tap the FHLB. At rates of 5%, this new lending is far cheaper than what the firm would have been forced to pay were it to continue its dependence on commercial paper markets, depositors, bond markets, or the stock market. According to Reuters, Countrywide would have had to pay anywhere between 6–12% to roll over its commercial paper in August.

You see, Countrywide is a big BORROWER, not a lender. And that goes for your mortgage company too — your mortgage company is really a big fat DEBTOR. They may seem all high and mighty as the lender, but in reality they are hat in hand, tiptoeing to Uncle Sam for more and more loans. And Uncle Sam is writing checks except that it isn't your Uncle who will pay, but you and I.

It is not just Countrywide that has turned to the FHL Banks. Many of the banks and thrifts have. Washington Mutual’s borrowing jumped from $16 billion last quarter to $43.7 billion this quarter while World Savings Bank (a subsidiary of financial giant Wachovia) has borrowed $68 billion, up from $28.5 billion only a few months ago. Both are large mortgage originators. Year-to-date increases in FHLB advances to members have increased by the greatest amount ever. On a percentage basis this sort of growth has not been seen since the 1990s.

So there you have it. This is why I urge you to realize, as Bill said in an email to me recently, that the sun will rise in the morning even if you are delinquent, in foreclosure or lose your house altogether.

The fact is that we take our debts personally. But we shouldn't. It isn't personal. Do you think Countrywide takes its debts personally? Hahahaha! What Countrywide does is what is best for Countrywide. If it needs cash, it goes to the US Government and gets some.

If you are currently under water and owe more than your house is worth, think about how you can get out from under. Don't be ashamed of it either. It's just business. Good business. The credit card companies that lent you money expect some of that money to never get paid back. If you have to work things out so you can live comfortably, do it. Do it so that your credit is helped, not harmed. Work out your debts outside of bankruptcy if possible because bankruptcy isn't an escape anyway, especially with the new bankruptcy laws that make it a bad joke at the expense of people like you and me.

Think more like Countrywide. It's just business. And make sure you get on my high quality list so you get the pre-announcement when Mortgage Relief Formula hits and is finally available. You'll get instant access to a vitally important 25 page report, Keep Your Home, and information too sensitive to publicly put on this blog. Privacy always assured and you can unsubscribe in a heartbeat.