Originally Posted by Martha
Bailout proposals don't involve paying people's loans. Usually they involve restructures where the payments are stretched out over a longer period of time so the payment amounts are reduced. Even interest rate reductions are not common. Periodically, when foreclosures are prevalent there is a mortgage moratorium passed which allows some additional time for borrowers to catch up on their loan before it is foreclosed. This can mean that if the borrower doesn't try to catch up the borrower lives in the place for free for a while.
Unfortunately, when I read:
""We will be proposing significant amounts of dollars," Schumer told reporters after being asked if a large federal bailout may be needed."
......it sounds to me like tax dollars will be spent to buy votes. Foreclosure is the most expensive solution, so the market should be able to resolve this via restructuring as many loans as possible with NO BAILOUT by the Gov't.
Now, I could maybe see some sort of limited moratorium on foreclosures only because they push values down throughout the market and would devastate some neighborhoods, especially in areas undergoing restoration.