I said here over the last 3 years and so have a number of drowned out pundits, but the facts don't lie. Reworking mortgages is not a solution for the problem. According to the AP, More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That’s at least $25 billion down the drain, and it’s still early in the game, more reworked mortgages will go down the tubes with our tax dollars. Thanks barry, we appreciate your piss poor judgment and largess with our tax dollars.
The pace of borrowers with reworked mortgages dropping out of this program is accelerating at break neck speed. More than 430,000 people have dropped from this program since its inception and more than a third in the last month. You can't blame this on unemployment or under employment. They are factors, but the truth of the matter is that along with a big that has all the trimmings, there is a BMW and SUV in the garage, tons of consumer debt accrued by people filling their grand opus with big screen TVs, stainless steel appliances, designer clothes and other trappings of trying to be a Real Housewife.
The only cure for our real estate disease, if you can call gross stupidity that, is true price discovery. The message is clear, even the most extreme programs cannot salvage the real estate markets. It’s high time to let the markets and the century old mechanisms that are in place to do what they were intended to do.