nsr,
You gotta understand the concept of sunk costs. The property has declined in value and we cant change that right now. The big WS banks are being propped up by our tax dollars and we cant change that either. If the lender forecloses the loss is greater and incured immediately. That would require an even greater tax subsidy.
The people getting these modifications go through alot of hoops to get them. I didnt calculate the 6% number but I’ll take your word on that. Thats not a huge number and remember after 7 years it capped so if your income goes up less than 6% you can catch up in a few more years.
The papers are very clear and will there is plenty of legal mumbo jumbo fine print the important material points are all very straight forward and clearly stated. You would have to be an imbicile not to understand. granted there are plenty of imbiciles in this country.
Your simplification of the real problem is really flawed. Rent is not tax deductible while the interest and taxes that comprise the majority of that payment are. So the 31% of income on housing is 20 to 25% with the tax benefit. Also rent can go up every year but after 7 years the payments here are capped. Moving every couple of years is expensive while sitting on your couch watching South Park re-runs for the next 20 years is pretty cheap.
