Great comment, you’ve touched on some crucial points and criticisms. There certainly has been an entire audience that would agree with your comment that “it’s sending the wrong message to the citizens that if you spend over your head, it’s ok…” That has been a point of criticism of these relief programs since they were first announced.

I agree that mods will and have worked for a select group. The statistics are clearing showing that even those who are helped, for one reason or the other, end up failing anyway.

My opinion on the bank’s involvement with these mods is a conflicted one. Banks are being pressed by Washington to save capital, all the while being pressured to do other things like modify loans. The bank’s participation in the mod program is completely voluntary. That being said, this blog has heard from many different homeowners who have just had a horrendous experience in dealing w/ their given bank. Whether paper work gets lost or the bank foreclosed despite the borrower making all of their trial payments…it’s a mess.

The market will have to correct itself, but as I said, there are a lot more pieces that have to fit in before housing can recover. There’s not much we can do about these programs beside hope they start working better than they have.

Again, great comment, please visit us again soon!

Thanks,
Tim

I think it’s sending the wrong message to the citizens that if you spend over your head, it’s ok, you can use the economy as an excuse and you’ll receive a get out of debt free card or we’ll lessen the burden by making your overspent home more affordable.

In theory the modification should work for a very small select group of people. But the criteria & the process is far too vague and far too inferior. I think the banks need to spend more time fine tuning this before it will work for the people who honestly and truly need it.

As it stands now, the loan mod is only a temporary bandaid that will delay the inveitable for a poorly budgeted family that spends above their means. The market will have to correct itself and the loan modification is only making this process longer and more painful. Especially for taxpayers that also have underwater mortgages and aren’t leaving their homes and aren’t asking for help.