What We're Hearing

The new White House plan is out to stem the foreclosure crisis and skeptics are probably scratching their heads, saying "Why bother?" (You can count me among those skeptics.) Maybe some 'A' paper borrowers who lost their jobs and are facing long term unemployment will be saved. And that's a good thing. But let's look at the hard numbers. At year-end, consumers owed $777 billion on their A- to D loans and you can anticipate that at least half these mortgages are toast -- dead and done for. That amounts to $389 billion (rounded). You can figure at least 15% of the 'A' paper market will wind up in foreclosure, amounting to $780 billion in dead paper. Add the two together and we get: $1.169 trillion in foreclosure trouble. (Figures courtesy of National Mortgage News' Quarterly Data Report.) The Obama plan entails spending $50 billion. If the White House really wants to stem the foreclosure crisis I have one suggestion: concentrate on getting more Americans back to work and stop wasting everyone's time...