8 Alpha-Zulu

A Spurious Solution to the Housing Crisis

You're right Markham, the "programme" would merely be borrowing from Peter to pay Paul (unless the debt sponsor/the government were to forgive the obligation or commit to forgiving same at some time in the future). Ridiculous actually.
What we may need to do (or at least think about) is create a Government Sponsored 40 Year Amortization Guaranty so that GSE's and Lenders on the mortgaging side could manage their way through this valuation issue by re-casting/re-financin... the existing o/s balance of any loan on these under-water mortgages into a 40yr amortization schedule that is guaranteed by the GSE (backed by the govt). This would, overnight, decrease the monthly payments for the homeowners, keep them in their homes and give the markets time to heal. As these mortgages are paid off in due time and/or are refinanced when the markets are more liquid it just be a faded blip on the screen of history.