JP-The big boyz asset shell game will be done before all the other “market distortions” work thru the system. I spoke to a lawyer that works at a firm that does loan mods. He said they do about 200-300 a month and 1/3 of them are principle reductions which essentially is a FHA refi were they will take somebody from like 120% LTV down to 97.5% LTV. The other re-works are with the existing lender based on “hardship” and ability to pay. A very common hardship is one spouse lost a job, but he said that the hardship “umbrella” is wide and they can get “creative”. The standard re-works are typically interest rate reductions. IMO, Loan mods and other inventory distortions(rent and sale) are still just noise at this point until the purchasing power of the average homeowner finds a floor and their still is a lot of deflation going on in that arena for the foreseeable future.
