America in Wonderland: Mortgages Through the Lookingglass

As if the mortgage industry could not be manhandled by Uncle Sam any more, here comes this story from the Washington Post - Obama readies steps to fight foreclosures, particularly for unemployed:

The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday. 

My Comments:  What!?  What a great way to create an incentive to lose your job.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether. 

My Comments:  A lender "could allow" payments to be skipped?  What a privileged!  Thank you Uncle Sam for giving lenders "permission" to allow borrowers to skip payments.  I know lenders have really been wanting to let borrowers freeload and skip payments anyway.  Lenders can finally breathe easy and stop receiving all those annoying interest payments from borrowers. Thanks goodness! 

The administration has been facing increasing pressure from lawmakers and housing advocates to overhaul its foreclosure prevention efforts. So far, fewer than 200,000 borrowers have received permanent loan modifications under its $75 billion marquee program, known as Making Home Affordable. In the meantime, there is a growing backlog of distressed borrowers awaiting help from their lenders, which threatens to undercut efforts to stabilize the housing market. 

My Comments:  House prices are based on affordability.  If people can't afford a home, then house prices need to go down until they can.  That's supply and demand at work.  These government programs just delay the inevitable and convolute the market.  The answers are short sale, foreclosure, and deeds-in-lieu of foreclosure.  People can always rent their neighbors house who foreclosed and is now priced affordably for today's market conditions.