Why people will be homeless before they are bailed out by people we bailed out

From the Wall Street Journal:

The $1.7 trillion mortgage securitization market is still a mess, despite (or in part because of) the Federal Reserve's $700 billion splurge into the market. But another reason may be Treasury's decision to undermine private mortgage-backed securities (MBS) contracts.

BlackRock Inc. Chairman Laurence Fink went so far recently as to call this "one of the biggest issues facing American capitalism." He's worried that to protect banks from billions of dollars more in writedowns on bad second liens (a.k.a., home-equity loans), Treasury is trashing private contracts. "There is modification going on protecting our banks, protecting their balance sheets" and "I'm just very worried about it."

Ah, yes. The law. Contract law in this case. Who knew there'd be a downside to transferring risk to someone's balance sheet [by securitization]? How could you possibly have thought there would be clear contract law in place to allow for worst case scenarios?

So the circle we're trapped in is, we had to bail out the banks so they wouldn't bring down the economy. But - they can't use our money that bailed them out to help bail you out since current contract law won't let them.