Obama to institute mortgage forgiveness?

[Bienes Raices]

http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/

I don't know if this has been posted, or if it would really happen. But I wonder if this would cause the short sales to disappear if it went through?

[Bienes Raices]

I'm thinking of it less in political terms and more market. At a lot of the short sales I go to see, the owner has vacated, sometimes moving to another state. So, if this goes through, would these people move back into their old homes, or put them on the market as regular sales, or rent them out and create a glut of rentals?

Also, I'm wondering what this would do to housing prices overall. The other mortgage mod. programs have flopped, but if this is accurate it sounds like a much bigger deal.