I think I must still be missing the point. If you have a traditional bond (corp, muni, treas., etc) that matures in 30 years to $1000, but is currently selling at a discount (suppose $900) do you consider yourself to have a $1000 or $900 bond position? Maybe these are not the same, but I am having difficulty separating the two in the old noggin. A mortgage does indeed mean what you and JOE say, but it can only be realized AT THAT INSTANT as the equity value. To do so otherwise seems to suggest that we base asset allocation on what we expect to have in 30 years.
Again, I apologize for my thickness and am by no means firm on my position. If you will bear with me, could you please explain further.