If a maximum of 7% can benefit from the plan, and it’s voluntary, then I’m guessing far less than 7% will actually get a freeze.

There was so much greed and deception from all sides here… But yes, some homeowners really got shafted because they trusted snakes.

This is much like, say, a tax accountant. If a tax accountant gives ridiculously bad advice, the taxpayers would still owe any tax they tried to avoid, but penalties would be waived because they relied on (flawed) expert advice. In some circumstances, the accountant can be fined, charged with criminal conduct, kicked out of his/her professional association or (as happened to one accountant from whom I’ve inherited several clients) barred from practice for life. Everyone recognizes that if the professional gives bad advice, the client is not to blame.

In the case of a mortgage, there’s no doubt the borrower owes the principle, which is secured by his/her property. But there’s certainly a precedent for not penalizing the individual who relied on bad professional advice. More and more, I think loss of interest income ought to be born by the lenders– those “professionals” who pushed the subprime loans in the first place– and to whom the buyers of their repackaged bond products will now be looking.