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And for most muni borrowers, debt loads are not crippling.
A former employee who testified in a separate civil suit against Morgan Stanley said that bank officials knowingly bought loans in which borrowers' debt levels were more than 50 percent of their total income, according to the A.C.L.U.
While Egan-Jones, an upstart bond rating agency in Wynnewood, Pa., has downgraded MBIA's own debt (as opposed to the insurance guarantee MBIA makes on other borrowers' debt) from AA to A+, investors are not terribly worried: Credit swaps on MBIA's debt have rallied with the market.
The Education Department has made "significant progress" in reviewing borrowers' debt relief claims, Undersecretary Ted Mitchell said.
The White House has promoted these plans, which cap payments relative to borrowers' incomes, in hopes of reducing borrowers' debt burdens and defaults.
On Monday, the Education Department seemed to provide evidence to back up Waters' assertion when it posted 14 job openings for lawyers to adjudicate borrowers' debt relief applications.
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No borrowers' debts have been eliminated.
A fall in prices would inflate the real value of borrowers' debts, nudging some of them into default.
Prudent savers and pensioners have been hung out to dry and QE2 will further sacrifice the financial health of pension funds, pensioners and savers, while devaluing borrowers' debts.
So lenders and their collectors are rushing to round up what money they can before things get worse, even if that means forgiving part of some borrowers' debts.
In the 1990s Mexico cleaned up its debt crisis by offering large government subsidies, of up to 60% of a loan's book value, to help pay down borrowers' debts.
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CEO of Professional Science Editing for Scientists @ prosciediting.com