A simpler, more effective long term, bottom up approach makes more sense.
Have the federal government mandate all mortgage lenders (especially Freddie and Fannie) offer a 3.5% 30yr mortgage to all US home owners. This would put hundreds of dollars per month into households for saving, spending or reducing debt. And, in the case of those facing foreclosure, it could help people keep their homes. It would help fix the economy from the ground up and give us a stable foundation for the road to recovery.

I think what Blair is really trying to do is stabilize home prices and mortgages, which is a difficult thing to do right now. If tons of people are kicked out of their homes prices should fall and the underlying mortgages should fall in value since they’ll see a skyrocket in default rates.

So it is unfair that some people gaming the system will benefit from this, but it seems like that in light of the crisis there’s really a limited amount of options available.

“Bair contends any rescue plan should focus more on the plight of distressed “———”, whose higher-than-expected “—-” payments due to rate resets have them over-extended in a slowing economy. “