Nonprofits say working families were taken advantage of by predatory lending so it’s them we need to help. Local governments are cringing over the idea of a run on housing and plummeting property taxes. And everyone with a stock portfolio is anxious to prop the market up.

Oh wait, I almost forgot about the kind folks who lent the money in the first place (from the WaPo article):

“If we foreclose, we lose 50 cents on the dollar generally, and the cost to restructure the debt is typically a heck of a lot lower than that,” Litton said. “That’s our motivation.”

Are we bailing out the banks again?

I hear what you’re saying… Given that this is a private entity that will be refinancing, I think they’ll try to pick and choose the people who actually have the ability to pay their mortgage, but are getting hammered by a resetting ARM, or are already at a too-high interest rate. I think they’d be targeting people in a bad loan, not people who simply can’t afford their house.

The other question is whether refinancing is really going to help these people. If they are having trouble paying their mortgages, they obviously have financial problems. Those problems aren’t going to go away after the loan is refinanced.