The “loan modification” game being worked out by the accountants is similar to the most recent bankruptcy laws where a debtor gets shackled and tied to his loans and contractual obligations till there is no more blood to squeeze. The debtors can’t walk away easily – the rule makers are making sure of that! Inspite of this effort of minimizing foreclosures, the deflation of housing prices won’t be stopped because the FLIPPING GAME which created the bubble is way over.
They make it sound like they are “helping” the homedebtors. The truth is, the banks will punish those who got into the flipping game by not letting them easily off the hook. As a consequence, these homedebtors can’t go buy another house or two to flip down the road. Let me guess, if these homedebtors won’t cooperate with their lenders to get “loan modification”, somehow, they would be blacklisted and would end up as Forever-Renters.
It’s all good, in the end. These homedebtors are prevented from buying another house (ever) again, I hope.
