Is it really black and white, succeed or fail? If failure means that a freeze will not stop home values from dropping a penny more, then I agree that this measure will fail. I would disagree with anyone who thinks that freeze’s, modifications and the like will have no impact on housing values if they are accomplished in significant numbers.
Where I get confused with Mish on this one is that he advocates a “free market” scenario and implies that the Governator’s “plan” is decidedly not free market. Correct me if I misunderstand, but this freeze is not a mandate. The lenders merely agreed to freeze, and upon their own terms. The insinuation is that anything other than abiding by the original terms of the loan and a fast-track to foreclosure is not “free market”. I couldn’t disagree more. If, at the end of the day, the lenders are permitted to foreclose, short sell, modify, freeze, etc etc., then it’s free market as far as I’m concerned. And I think that’s where we still are today.
