Tuesday, July 14, 2009

Mortgage Modification News

Reuters reports that U.S. officials are thinking about further ways to forgive debts for the unemployed. That's bad news, but at least one of those official partly recognizes that such a policy "could create perverse incentives."

Data was also release showing that 185,000 mortgages were modified in 2009 Q1. That's a lot (too many, IMO), although less than the pace the Obama Administration would like see.


[update: Now Reuters reports consideration of a plan to allow unemployed people to become renters of their home. Note that, for a homeowner whose mortgage is underwater, this at least amounts to forgiving the entire amount that the mortgage that exceeds the value of the house. To the extent that there are a surplus of houses supplied to the rental market, this "rent your house" plan might be even more generous than that.]

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