Help Is on the Way? Obama Outlines Mortgage Plan

Marks blames the heads of some financial firms for not doing enough. Earlier this month, Marks and about 400 other people staged a protest in front of the Greenwich, Conn., home of William Frey, manager of Greenwich Financial Services, and the Rye, N.Y., home of John Mack, chief executive of Morgan Stanley.

Marks said the government needs to somehow provide an incentive to executives like Frey and Mack to solve the problem. For instance, banks and other loan servicers right now have no incentive to hire more staff to restructure existing mortgages.

His solution: have the government pay $1,000 for every restructure they do. Under that plan, 10 million mortgages could be reworked for less than the $100 billion figure being thrown around.

"Obviously, prior to this, $100 billion seemed like a lot of money. Now, we think of $100 billion, it's just $100 billion," Marks said. "Boy, has the world changed."

But it's not as simple as just lowering an interest rate or forgiving debt. Somebody's got to foot the bill.

Investors would love for the government to pay the cost of reworking the mortgages, saving them potential large losses. And advocates like Marks suggest the government rework the loans, forcing investors to take a loss.

The investors would suffer, he said, "but they are taking less of a hit than they ordinarily would" if everybody defaults on their loans.

With reports from Jake Tapper and Matthew Jaffe

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