Wednesday, March 4, 2009

9,000,000 doses of UI-steroids

I have been the most aggressive as to estimating the number of people who could have their mortgages modified, in November estimating roughly 1,000,0000.

Now the Obama administration says that as many as 9,000,000 households may have their mortgages modified.

In addition, it was reported today that one in five home mortgages are under water. Last fall, it was thought to be one in ten or one in twelve.
I do not see how employment can get much better this year if the Obama administration is going to magnify the problem.

[The Treasury has now unwittingly confirmed my calculations (originally here) of the terrible incentives of this program -- see their "Family C" example -- it shows how that family's reduced in come now is able to reduce its housing payments for the next five years.]

1 comment:

John said...

I think it's 1 in 5 mortgages (ie., 1 in 5 homes with mortgages), that are underwater, not 1 in 5 homes. About 30% of owner-occupied homes have no mortgage (about 25m of the 75m owner-occuped homes, out of total of about 126m housing units).

Many news reports get the details wrong, and my friends quote those (wrong) numbers. These numbers come from RealtyTrac and Census Bureau/HUD via

Is there a reliable source that summarizes the housing/mortgage & foreclosure numbers accurately (w/o having to go to the Census Bureau etc)? eg, How many abandoned/empty houses are there? Some friends tell me it was 1 in 9. Can't be that high.