Reply #1: Cramdowns instead of bailouts could have solved a LOT of problems [View All]

Everyone with a mortgage underwater (and who actually could afford the home they were buying) could have leveled things out , and done it cheaper too..

The way they chose to do it, only allowed the banks to keep their bogus mortgages, and left people on the hook for hyper-inflated mortgages, and then dumped millions of foreclosed houses onto the market.

All this stuff is computerized.. It's not rocket science. There was a way to evaluate what percentage particular markets were overrated. and to just reduce the principle amounts by the percentage. People could have suddenly afforded payments, and banks would not be siting on loads of bogus loans on empty houses..

This could have easily been limited to homes worth no more than a specified amount (to keep the Richie Rich types from scamming the system)