Of course what this will ultimately achieve is that homeowners will continue to live in the home, yet make no payments probably for years.
How much $$$ will this put into the economy? Living mortgage free will allow that homeowner to use the money for living high on the hog.
The banks will be the ones who get screwed, although - they already have been to the public trough numerous times in this and the last administration.
Moral hazard - people will be more tempted to not live up to their obligations...
and, in the future, who in their right mind would lend mortgage money to anyone who just might not EVER be collectible?
this started in the 1990’s with defective paperwork.
Banks are just SERVICING loans for wall street mortgage default swap trusts. B of A bought SERVICING RIGHTS but not ownership of the promissory notes.
They have no right/standing to settle or sue.
All loans which which had their promissory notes sold are part of this mess.
Even if you pay the servicing agent there is ZERO guarantee some other trust will claim to own your promissory note, which they lost, was distroyed, and no longer exists, with no provable chain of custody.