We should not bail out *ANY*one. All it does is encourage the same, bad, irresponsible behaviour. Free market will sort it out. Those that were irresponsible will be out of business, replaced with responsible folks. And irresponsible homeowners will be replaced by responsible ones.
I see no negatives here whatsoever in letting the chips fall where the may.
There was though a large chunk of people who got contracts that were not understandable by the new standards of contract law. Judges have been negating some loan contracts in SOME cases for reasonable reasons.
It’s a one case at a time, but there should be no free buy outs.
Are any of the subprime brokers the same ones we bailed out in the Savings and Loan “Crisis?” The subprime people sure learned a good lesson from that bailout: take all the unreasonable risk you want. If you win you get rich and if you lose the government or the bankruptcy court will be there to help you out.
The market needs to experience the downside of risk or the risky behavior will increase. Bailouts only lead to a repeat of the same failure.