I guess you are missing the point. The cases where this HAS BEEN done are homes about to be foreclosed upon where there is a motivated individual that wants to but cant afford to stay in their home. There is a loss that is about to be recognized. The bank DOES NOT have the option of recognizing the loss or not. It is imminent. What they are doing is mitigating their loss and taking the writedown without going through the expensive foreclosure process. I’m sure it is done on a case by case basis and not something that would be widely advertised. Certainly not a single solution for the bubble but simply another tool that could be used.
