Still don't think a bailout is possible? You think Senators like Schumer are proposing a bailout to really help out the average Joe????
Doubt it. I wouldn't be surprised that he has ties to banking institutions. Here's the "theory" that I'd piece together:
* Banks know they're up sh!t's creek
* Banks want a bailout, without going public to avoid freaking out the general masses (investors, etc).
* Current government in control (in this case Democrats) don't want to go down in history as the ones that didn't do squat for the people. Also, they have big corp lobbying groups to appease.
* Bank corps and congress/government work out a deal.
* Congress puts bills out in public screaming for bailout/loan reform to win public support for the average otherwise screwed Joe.
* Meanwhile congress structures bailout/load reform geared to protect the Bank corps from going under under the guise of "helping" average Joe.
–> Loan terms will be extended to lower monthly payments, but keep people locked in longer than 30 years (40 or 50 years???)
–> At the same time, loan terms are tightened to make it harder for screwed average Joe to obtain other loan terms.
–> At the same time, perhaps additional legislation/law enforcement will be proposed that makes it harder for average screwed joe to walk away from existing loans. For example, the threat of prosecuting Alt-A borrowers who lied, but will be "forgiven" if they accept the new loan terms.
All for the purpose of stringing out troubled borrowers across years, to avoid 1 shot flood of screwed people. Instead, small groups of screwed people spread out across the years. It also buys banks time for real estate to recover some of the decline so BANKS don't have to bear the brunt.
