[quote=jpinpb]Well, that’s what I’m thinking. They’ll keep what makes sense, either rent or re-work some loans, but let the ones that don’t make sense just go to market for whatever, b/c no skin off them, really. Basically, just delaying again. Seems all they can do is continue to sweep under the rug. I don’t know how long they can procrastinate. I mean, forever. That’s a lot of houses to just twist in the wind forever. [/quote]
I think I see what you’re wondering about, jp. My assumption is that our leaders are aiming to generate inflation that will allow prices to return to levels in the ballpark of the peak. But it might take years to get that done. In the meanwhile, they have to limit market supply, and make lending easy, to prevent house prices going so low for so long that expectations are completely reset.
So the goal would be to mod enough existing loans (and keep short-term rates low enough that ARMs don’t have a sting) to slow down the foreclosure supply, and on the demand side allow high LTV FHA and FNMA/Freddie-backed loans to flow easily. They don’t have to keep it going at full tilt forever, just until inflation gets going. Maybe 1-2 years. The gradually ease up and focus on inflation.
