Not all of the mortgages have been walked away from. Not all are worthless. The idea was to have a reverse auction where the government would take the the low bid. Plus, once the government owns the paper they can adjust, reset, and otherwise modify them in order to get them performing. There has been a lot of rhetoric, and a lot of posturing, but not a lot of understanding of just what a "credit freeze" really does mean to main street. It is not about any certain institutions failing or not. It is about jumpstarting a system that is not functioning right now. There may be more than one way to do it, but it needs to be done.