[quote=SD Realtor]I can understand the logic… it is simply a kick the can down the road policy…
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No. It isn’t. Kick the can would be reducing the interest rate or deferring interest and not adjusting the principle balance. Adjusting the principle balance turns (or at least may turn) an underwater loan into a good loan. Permanently. I don’t suspect there will ever be widespread principle adjustments, either as a result of legislation or otherwise. Even if congress were to reinstitute the cram-down provisions of the bankruptcy law, as applies to personal residences, it still wouldn’t happen very often. Even though maybe it should. But this doesn’t necessarily create only a temporary fix. It may very well be a permanent fix for some borrowers.
