To match Special Report MARKETS/HAIRCUT
Donald Bonner, 61, who has been delinquent on his mortgage payments for three to four months, speaks with a mortgage specialist at a JPMorgan Chase foreclosure consultation event in New York, in this March 31, 2011 file photo. More than three years after the financial crisis struck, the U.S. economy remains stuck in a consumer debt trap. It's a situation that could take years to correct itself. That's why some economists are calling for a radical step: massive debt relief. Federal policy makers, they suggest, should broker what amounts to an out-of-court settlement between institutional bond investors, banks and consumer advocates - essentially, a "great haircut" to jumpstart the economy. What some are envisioning is a negotiated process in which cash-strapped homeowners get real mortgage relief, even if it means forcing banks to incur severe write-downs and bond investors to absorb haircuts, or losses, in some of the securities sold by those institutions. Picture taken March 31, 2011. To match Special Report MARKETS/HAIRCUT REUTERS/Shannon Stapleton/Files (UNITED STATES - Tags: BUSINESS REAL ESTATE)