The reason we have this crap going on is quite simple, and fixing it is also quite simple:
Banks are holding homes back and foreclosing when they should be modifying as a direct consequence of the policies and actions of the government.
As just one example the “loss share” agreement made with the buyers of IndyMac has set up a perverse incentive system where the usual incentives to modify loans have been intentionally and wantonly destroyed.
If you remember this was the deal announced:
This article, though I read it fast, scares me. I do not want the politicians to automatically foreclose on properties that are 90 days late UNTIL the other side – the side that says they MUST work with eligible homeowners in a timely fashion FIRST – is regulated. Many many eligible people have been working for months and months with the banks and just getting the runaround.