http://www.nytimes.com/2011/10/13/opinion/how-to-stop-the-drop-in-home-values.html

This is interesting. It makes both the homeowner and bank suffer some pain. The homeowner by changing the terms so that other assets of the homeowner become attachable and the bank by losing money via mortgage reductions.

Is it better than continuing foreclosures at the current rate? I know a person who is considering simply walking away from this house since he bought it with a no-principal loan about 5 yrs ago. I don't know if he would be motivated to stay in is house if this option were possible. He might.

What effect would it have on the overall economy?

__________________
1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13