HAMP’s complete failure – to date only $250 million of the $75 billion

[midnight]

promised by the program has even been spent,


Everyone who has tried to make this voluntary system work must know that they are operating without a hammer, a legitimate incentive (not the relatively weak cash outlay HAMP offers) to the banks, in the form of a stick and not a carrot, to implement the modifications. Cramdown could have been that hammer, but a captured Congress decided against it. So all that’s left as leverage for someone facing foreclosure is the threat to walk away. This is way Fannie and Freddie, along with Congress, are trying to punish strategic defaulters, as they have been termed, by denying them FHA-backed loans (basically all non-jumbo loans) for seven years.

There’s a moral component to this. Basically, people in trouble are being told they’re bad people for considering getting out of their predicament. They’re being compared to welfare queens and demonized in the elite media. As a result you turn houses into debtor’s prisons, a point reiterated by civil rights leader and organizer Gerald Taylor on a separate panel about the financial sector. “They are trying to bully and punish average folk and put them in a modern-day debtor’s prison,” Taylor said. “The banks won’t do it on their own. This change won’t happen unless we create a crisis.” http://firedoglake.com/[br />
I'm not buying that theme from those holding our tax payer dollars-rich need tax cuts, bail outs, and instruments to keep their winnings. Everyone else is lazy, and not entitled.