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No, no, no, you have it wrong Lorrie. The mortgages will not be ADJUSTED, the government will BUY the inflated mortgage AS IS and then renegotiate the refinancing at the present market value. So, the government would be BUYING out a loan, lets say at $200,000 but the value of the home is only $100,000. The government will then basically refinance the loan at the lower value. Meaning that the government and the tax payers are out $100,000. The mortgage isn't just going to be adjusted.
And this is NOT all failing mortgages, only the ones where the buyers were stupid enough to finance with the variable interest rates. So, if John Doe made a reasonable investment in his home at a fixed interest rate and then he gets laid off or due to some economic hardship cannot pay his mortgage at no fault of his own....TO FREAKING BAD!! But, Joe Bloe that took that mortgage that was 2/3 of his income and with a variable interest rate can't pay his mortgage due to his own stupidity...THE GOVERNMENT IS GOING TO BAIL HIM OUT.
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