So from what everyone is hearing this morning, is this bailout going to effectively “save” all of the upside down borrowers by means of the government taking all the bad mortgages, then renegotiating the loans down to market values?
If this is the case, it will artificially prop-up housing prices because foreclosures may slow substantially, hence disallowing the natural market to correct itself.
Or, is this plan just going to free up the credit markets so financial institutions will start lending to each other again?
