One thing I think would help a great deal at this time is multiple approaches to lowering debt burden. This Catch-22 of people who are stuck with high interest rate debt in a time of historic low rate availability is just too stupid to continue to ignore (HAMP/HARP not to the contrary). The idea that you "can't qualify" to cut your ongoing rate -- whether it's a mortgage, auto loan, or credit card -- through a refinance, but you presumably "can" continue to be crushed by the higher rate ... seems ripe for action.
Rather than buying 5% defaulted debt and retiring it (which has been defaulted and likely will be retired anyway), why not buy some of that 18% credit card debt and repackage it into something that people can actually pay off and get out from under?
I believe this is what Freddie/Fannie should be doing at this time, but don't get me started on that one.
http://www.propublica.org/article/why-freddie-mac-resisted-refis
Freddie Mac, the taxpayer-owned mortgage giant, made it harder for millions of Americans to refinance their high-interest-rate mortgages for fear it would cut into company profits, present and former Freddie Mac officials disclosed in recent interviews.
In closed door meetings, two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason, according to the interviews: They regarded it as a backdoor economic stimulus.
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