Do you think any debt will just go away? no the borrowers of these debts still owe the money after all they signed for them. The bail out was to keep them afloat while all of these were going bad. I am sorry for your neighbor but he may seek remedy under the U.S. bankruptcy laws as many havePretty simple really: to get bad debts off their books. Go ahead and take the loss one time, get the pain over with, and the books look a lot better next year.
Banks are like any other business. They're not offering a public service that folks are somehow entitled to. They are in business to make money.This is a tough question.

So borrowers go to the bank to request money from them in order to purchase something, such as a house we'll go with. The bank accepts their request and delivers $150,000 to the borrowers. So the bank is out $150,000 and is looking for a way to recover that quickly. They can sell that loan to companies such as Fannie Mae and Freddie Mac. So now the bank has an extra $150,000 to distribute to new borrowers.

Hope this helps a little… you have to think of it as a pipeline. In order to keep the pipeline moving, you have to get rid of the old or bad material.

 

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