I’ve been saying for **years** that the govt would try to intervene via the GSEs and FHA, along with massive loan mods — including principal write-downs. I even suggested principal write-downs at a Community Reinvestment Task Force meeting last year, and also recommended it in letters, faxes and phone calls to multiple representatives, the White House, the Fed and Treasury, along with other regulatory agencies — but recommended the “written-off” portion be split into a non-recourse loan that could be sold on the secondary market and would accrue interest, and be due upon sale. Also said that any deferred amount would have to somehow be reflected in public records since the original sale price was not valid (could never be paid off by the borrower w/o appreciation).
I also said that these measures would **prolong** the recession/depression, not get us out of it. It remains to be seen if that prediction is correct.
