Concern over the foreclosure crisis has even spurred talk of a government bailout similar to the $700 billion Wall Street bailout under the Troubled Asset Relief Program.
Concern over the foreclosure crisis has even spurred talk of a government bailout similar to the controversial, $700 billion Wall Street bailout under the Troubled Asset Relief Program.
CNBC's John Carney, in a blog, predicted that the federal government and congress would again come to the rescue.
"All the screwed up paperwork ... will be forgiven by a legislative act," he wrote.
"The lame duck session of Congress will pass a bill that essentially papers over the misdeeds of the banks that originated mortgage securities," Carney wrote. "Every member of Congress and every Senator who has been voted out of office will cast a vote for the bill. And the President will sign it. ... Congress may try to create some cost for banks in exchange for the forgiveness, perhaps requiring more mortgage modifications."
But Barry Ritholtz, a noted financial commentator and author of "Bailout Nation," said such a scenario was unlikely, given the strong feelings against the TARP bailout.
"There's just no appetite for it," he said. "You have bad actors across the board. Who do you want to rescue? There are almost no sympathetic players. You have the deadbeat homeowners, which everybody seems to think that this is about keeping the deadbeats in the house. The people who are being foreclosed upon -- with robo-signers and everything else -- the vast majority are going to be gone anyway, whether it's a week or a month or maybe another three months.
"What it really tells us is that the banks are wildly under-regulated," he said. "It's like the Keystone cops. I can't imagine that there's any bailout coming for this. There are just no good players anywhere."
White also said he thought the idea of a bailout was too unpopular.
"The way I sense the political landscape, that's the last thing I can imagine the Congress wanting to do," he said of a bailout. "You have voter anger at a lot of people -- at government, at banks, at reckless borrowers who don't pay their bills. I can't imagine the outcome of all that unhappiness and anger ending up being a free pass for the banks."
With reporting by the Associated Press.