Nationally it could work out, but regionally I doubt there are enough of the borrowers who are “only” marginal for restructuring to have any noticable impact. Restructuruing a mortgage so that it’s $200/month cheaper in a $100,000 market like Kansas City is one thing; trying to do the same with a $1,200/month extra payment in a $600k market like SD is completely different. Night and day different.
The debts are owed, the investors are holding the paper and they’ve foregone payment so far. They can’t do it forever even if they wanted to and they DON’T want to.
Talk about restructuring sounds warm and fuzzy but it’s not even going to put a dent in the market here. It’ll just prolong the agony for a few of these marginal borrowers, and when the conventional rate finally does take effect they’ll lose it all then. Meanwhile the prices will continue to decline, thus creating more and more of these marginal and downright unviable refi situations.
