*IF* this mega bailout does get approved, US government will either control or own outright most mortgages issued during the bubble. They will be able to offer workout plans, approve short sales, reduce balances, etc. We will see fewer defaults and much fewer foreclosures. Basic tenet of housing bubble bust: prices are sticky, distressed inventory drives down prices. Take away distressed inventory, prices stop crashing. On one hand, it will minimize overcorrection and result in “soft landing”. On the other hand, it will take much longer for the most overpriced areas to normalize.
