Since under-water mortgage loans saddle many households with a nagging debt burden, some economists say new mortgage relief could open the spigot of consumer spending in the economy.
Some ideas, for example, involve the government subsidizing mortgage rewrites for people whose homes have sunk in value.
Critics argue that government-orchestrated fixes will be more costly than the economic benefits they provide, and that a better approach is simply to let troubled loans move to foreclosure. Or, as a middle ground, strategies like "short sales" can transfer ownership of troubled properties without the stigma of foreclosure.
