The banks that hold these mortgage portfolios were forced to write down the portfolios by marking them to market. In some cases that mark to market was as low as 13 c on the dollar

Lets use 30 c on the dollar for this example

the government buys the loans from the nak at 3 c on the dollar

Within those portfolios are an array of different types of mortgages

They are all tied to an asset a home

Lets say siomeone paid 500k for a home and is foreclosed on and the house sells for 250k after all fees

that is 50 c on the dollar on a loan they paid 30c for and on that loan the government makes a profit.

Bottom line is that none of the loans will be worthless as again there is an asset attached to them

My opinion is the government will make $ on this bailout. Hopefully they will contribute the gains to the consumers benefit in some way like possibbly paying down the deficit