[homegirl]

lenders to restructure troubled loans? Could we have avoided the current economic crisis? When the serious problems began with defaults on mortgages if the government had taken immediate action and required the lenders to restructure those loans to fixed rate 40 year loans could this mess have been avoided? As it is now the lenders have been bailed out and the taxpayers are stuck with the bad debt. How will we collect? Will we collect? If collected will the "trickle down" philosophy be applied, how, will each taxpayer receive a payout?Any ideas or info?

[Ricky]

You're forgetting one simple fact > the property secured by the mortgage is now worth LESS than when the loan was taken out. Meaning, not only would the restructuring require the borrower to come up with the difference between what the property is now worth & the total still owing, you would also need to come up with 5-10% down. So if you still owe 200K, & the property that is now worth $150K, plus 10% down, you'd need $65K up front. Meaning you would have to take a write off for whatever you paid in & your initial down payment. Not too likely you'd have another $65K just laying around. And I wouldn't count on a payout either> much of the paper held by mortgage companies are homes in foreclosure. This is again where there's more owing on the home than what the property is now worth.