No matter what the work-outs are, they are not dreamed-up to help the homeowners. They are to help the banks by slowing down/preventing the tides of foreclosure that may collapse our financial system.
The FBs who hang on to their house because of hope, or pride, or stupidity will work a long time to pay off their debts.
The academics talk about moral hazard, but government actions add moral hazard to the whole mix.
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Here’s a New Yorker article.
The argument against home ownership
What was a savings plan is now pushing some into indentured servitude
http://www.msnbc.msn.com/id/23439843/
“the downside has become clear: as many as fifteen million homeowners now owe more on their mortgages than their homes are worth. Homeownership isn’t building wealth for these people; it’s locking them into indentured servitude.”
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By end of the next year it’ll be 24 million homeowners upside down. That’s a HUGE number.
