More double dealing by the govt. On one hand it looks like the govt is giving the banks incentive to help homeowners by giving the banks credit for every dollar they use in the new program to write down loan balances.
However, if you read the fine print you will see that they are forgiving penalties banks incurred by double dealing. So in reality there is no cost to the banks at all.
If the banks had shown as much “forebearance” in dealing with the homeowners, as the govt has done with the banks, we would not be in this mess.