Foreclosure Crisis... What if?
Inevitably many will end up in foreclosure.
Nouriel Roubini was on CNBC discussing the new plan to freeze foreclosures for 30 days and follow that up with this post which gave some reasons why it won't help and a possible scenario...
...banks will have to eventually recognize that even a plan that freezes the reset of most mortgages will not be enough. To stop foreclosures
they will have to a accept a reduction of the face value of the mortgage to the lower current value of the home. While this may be costly to the banks
the alternative of foreclosure and selling such homes in a illiquid market is
worse for creditors. Thus, much more radical policy options should be considered
to avoid the biggest foreclosure crisis in US history.
Do you think this could happen and if it did would it actually
What would be the fair way to select who gets a reduction?