Steam in the mortgage market
In horse race betting there's a concept called 'steam'. A once-popular way of scamming a local off track betting place was to go to an actual horserace, bet big on a guaranteed loser horse, then go to an off track betting place and place a yet even bigger bet on the horse which was likely to win. Because off track betting placed didn't used to routinely use the same pool as at the track, they'd simply mimic the odds add the track, and by using steam you could induce them to place an extremely unfavorable bet.

What does this have to do with the mortgage market? Well, as it happens the credit default swap market is many times the size of the actual mortgage market. How'd that happen? Well, overzealous investors ran out of actual mortgages to invest in, so they simply started placing side bets on how the mortgage market would do, totally many times how big the actual market underneath is. AIG is in a position of being the biggest insurer of the garbage. These two facts put together make for an interesting possible scenario. Since the amount of money on the line is greater than the actual size of the underlying market, AIG could potentially agree to cover every mortgage company's loss in any short sale (a short sale is where the mortgage company agrees to forgive part of a loan to make a sale happen, as a way of avoiding forecloser). That would immediately result in the number of foreclosures being near zero, and AIG would magically have made it so it didn't have to pay out on any of its side bets.

Chances are that the numbers don't work out for this to be a winning proposition. Maybe the CDO insurance industry as a whole, rather than just the largest player, could manage to get away with it. In any case, it sure would be funny.