An article “The Mortgage Fix That Can Save the Economy” opines: “If lenders would reduce all underwater mortgages to their current market value, the nation’s banks could pump $71 billion per year into the economy, create more than 1 million jobs annually and save families up to $6,500 per year on mortgage payments, according to The New Bottom Line, a collaborative of 1,000 faith-based and community organizations who want Wall Street held accountable for the mess it created.”
WATCHDOG: To do that, financial institutions would have to recognize the true value of their real estate portfolios and a great number would be insolvent, including some of America’s leading banks. Almost all of the remainder would be technically in violation of Federal Reserve regulations.
Avoiding the writing down of loans has been one of the major government goals over the past three years.
