John At The Center

Remember that one of the things that’s going on now is that mortgage bankers are doing refis at greater than 100% LTV… this allows mortgage holders to at least benefit from lower rates, but doesn’t get into the territory of modifying the debt amount:

Here is an excellent blog post and Fed study. There is too much content for my summary to dominate clicking on the link but the bottom line is this:

This analysis suggests mortgage modifications – without principal reduction – will have limited success.

It is one of the best economics blog posts this week.

via Marginal Revolution: Reducing foreclosures.