Read full story here: http://www.npr.org/templates/story/story.php?storyId=87873542

The part that worries me (what I said in a post last night, reduce rates to teaser level): “Marks suggests a different approach: reducing the interest rate on the loans to make them affordable. His organization, which works with low income borrowers, is doing just that under an agreement it negotiated with Countrywide. NACA is refinancing loans and cutting rates by as much as 5 percent so borrowers can stay in their homes, Marks says.”

And Zandi:
“Though he is a private economist, Zandi has been shopping a plan around Washington that he believes could avoid massive foreclosures and stabilize the housing market. He envisions the government buying huge numbers of troubled mortgages and re-financing them at lower rates. Under Zandi’s plan, lenders would compete at auction to sell their mortgages to the government at a discount.

For instance, the government might pay just $150,000 dollars for a mortgage that was worth $200,000 originally. The government would then refinance the mortgage at a lower level, making it more affordable for the homeowner. In the end, this might cost taxpayers $100 billion, Zandi estimates. But, he says, it would be worth it to reduce the suffering of desperate homeowners, stabilize the housing market and get the economy back on track.”

Good, old taxpayers saving the day. I need a drink and I don’t even drink.