FHA foreclosure fix now in lenders' hands - Oct. 1, 2008

FHA foreclosure fix now in lenders' hands - Oct. 1, 2008

Sounds like a necessary step for lots of upside down mortgages. Perhaps the bail out, which I hate to admit, may be necessary for the banks to get back to the business of managing their assets. Wether they use their own formula or the governments formula Homeowners must be allowed to have the mortgage amount owed reduced to current pricing levels.

Shocking really so much conflicting information out there. Yesterday the NYTimes had an editorial that stated the "lost decade" of Japan was due to the fact that the Japanese Government did not move fast enough to bail out their banking system after the real estate correction of 1987. Which was counter what I had been reading for the last 10 yrs. I had picked up from consumer journalism that Japan's problem was that they never "took the pill" and propped up their banks instead of letting them go under. So I did a quick google search for "cause of Japan's "lost decade" and found that this correction in Japan has been studied extensively and there were many scholastic interpretation of the events. Two articles one undated is here, and another published just today here.

Perhaps the idea of removing this debt off the books of the banks can prevent deflation by allowing banks to reinvest assets instead of settling old debts. I think that public works need to be increased, they report Japan tried public spending and failed, with good management offering a positive result.

Big Stuff, I am not an economist, but hopefully "the imperfect ( or is it miserable) science" can save us our own "Lost Decade"