even if banks could chose to not reset arms, that wouldn’t do anything to save anyone. the bank would either be reneging on its obligations to the debt owners or it would be buying back the debt and financing it on it’s own. in the first case, the debt owners would scream bloody murder, sue the bank, drain its cash by dumping their holdings, destroy the bank’s credit, etc. in the second case, the bank would have to have the cash to buy back far more obligations than it has in reserve. in effect, it would only be able to buy back as much debt as they have in cash. meaning only a small fraction of mortgages could be suspended.
now, if your mommy and daddy were the bank, then sure. they could give you more time, they could float you some, they could even forgive you of the whole thing. everything would be peachy and no one would freak out about anything. the percentage of people who have mommy and daddy supporting them, however, is very small. very very small. miniscule.
maybe that’s why bush has no clue how to deal with the economy…
