Politicians have been posturing that the bailout should help “Main Street” vice “Wall Street” and should help “homeowners” – whatever that means.  The governor of New York, David Paterson, wrote an op/ed piece in Saturday’s Wall Street Journal with that headline.

His opinion stated “once the Treasury purchases distressed financial real estate assets, I strongly urge the government to require mass modifications to owner occupied home loans. This moderate investment might prevent thousands of foreclosures and considerable economic damage, much as the FDIC is doing with the loans it manages due to the failure of IndyMac bank”.  Does this mean everybody in America who has a loan that’s “underwater”, or has an interest rate they don’t like?

The first concrete steps were taken late yesterday afternoon when Congress published it’s “Emergency Economic Stabilization Act of 2008” Basically, most of the bill is centered around the buying of failed (or failing) mortgages on the books of lenders. There are 3 sections that deal with “homeowners”: sections 109, 110 and 124.

The following posts focus on those specific sections.