patrick.net

Still outrageous!

They're still drowning, but now you've handed them a government pamphlet that says "How to Deal with Drowning" complete with helpful illustrations by third graders.

I want me some!

thomhall says

How are you going to keep people in their homes when they are under water? Let them refi the underwater house!

That's not nearly as bad as you make it sound.

Most people plan on staying in their homes, and keeping people in their homes is good for society as a whole (strong, established communities, stable schools, etc.)

If someone is stretched and you can lower their payment by enough to convince them not to walk away, you're helping the economy:

1. The owner has more spare cash to save or buy stuff with.
2. The bank doesn't have another foreclosure on their hands.
3. Consumer confidence is lifted, which is really the biggest key to the overall health of the economy.

Now, I'm skeptical that these modifications will actually make any difference in the long run, but they might. If you can reduce the interest rate by at least 1 percentage point, you may very well be making the difference between staying and walking for many owners.

It sounds like they're trying keep prices artificially high and create another mini bubble.