Could an unintended consequence of helping people stay in their overpriced homes be a sharp drop in consumer spending? These families will be stretching to make their payments and no longer have access to HELOC money. If they were forced to leave their house (through foreclosure), and had to go rent something they could afford, then they would have more disposable income for eating out, vacations, etc.

I guess what I’m trying to say is that the kindest thing the government could do is to allow these people to get out of the housing trap they’re in and allow them to begin “starting over” that much sooner.