I don’t think I even know how to ask a question correctly. I know banks are not in business to help people, and I don’t expect them to. What I am trying to ask is:

1. Currently when people can’t make payments because their ARM resets, banks foreclose and try to sell at market value but no body is buying. Meanwhile, inventories keep piling up. Eventually, banks will have to sell at substantially lower prices.

2. Or they could work out some kind of deal with troubled home owners so they (banks) don’t have to go through the trouble of foreclosing, losing the interest income and selling at a loss later.

What Would it be in the banks’ best interest to do, 1 or 2?