Here’s our economic policy team’s video on what the need for a bailout to include provisions to restructure the mortgages that underlie the bad mortgage-backed securities. That should (a) help people stay in their homes, and (b) ensure that taxpayers get some value for any assets that we buy:
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Note that CAP has been pushing for action along these lines for months. If the Bush administration had decided to act earlier this year to readjust mortgages it’s possible that we could have preempted some of these problems.