Congress passing bill to alleviate mortgage payer distress

Following up on my previous blog about whether, much as the US government has bailed out lenders, the government should help loan-takers. It seems that the US Congress is about to pass a bill that will allow homeowners to avoid foreclosure by taking less expensive loans backed by the US government:

The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. Lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process.

I guess this is the path that the government was forced to take, having already bailed out major lenders. I still don't know if I am 100% on board with massive bailouts like this (regardless of whether it is for companies or people), but I am glad that the government is not simply focusing on corporate problems and entirely ignoring the people.

[via NYT]