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Maybe We Can Work It Out.(Capital Gains)(home loans)

Newsweek

| November 26, 2007 | Quinn, Jane Bryant | COPYRIGHT 2009 Newsweek, Inc. All rights reserved. Any reuse, distribution or alteration without express written permission of Newsweek is prohibited. For permission: www.newsweek.com. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: Jane Bryant Quinn; Reporter Associate: Temma EhrenfeldReporter Associate:

If banks would modify the loan terms, the majority of at-risk borrowers could pay their mortgages and stay in their homes.

Some 2.2 million homeowners face foreclosure, thanks to the subprime-mortgage bust. Their losses will drag down the value of nearby homes whose owners are faithfully making monthly payments. That implies worse to come for the institutions -- hedge funds, mutual funds, pension funds and banks -- that invested in these high-risk loans. Everyone says that something must be done, but what?

Subprime borrowers have modest credit scores and little or no…

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