With the mortgage crisis, are mortgage loan forbearance programs popular or are they seen as not being viable in the current economy?

A loan forbearance is in essence delaying the inevitable need to still make payments... often owing even more money when the delay time is over. Consider a woman recently featured in an article on Yahoo. She was in financial trouble and her student loans were put off.In the end, she was financially ruined.

Set aside debating financial responsibility of the individual (they take out a loan, they should pay for it). The current mortgage crisis is far more complex and layered than the above situation. One in five... to one in seven homeowners (depending on which report you read) is currently seriously upside down in their home loan.

Their home is worth about 30% less than they owe. In a normal economy, a 5% increase in equity is typical in most of the US. Based on this, a homeowner will not see a balancing for another 6 years.

This means in 6 years, maybe you will owe as much as the house is worth...but still $0 "equity". Considering the millions and millions of homes lurking in shadow inventory- this 6 years will likely stretch to even more years. There is little talk about this in the news.

Consider the following information: Is the US Economy Heading for a worse disaster than in 2009? If they cannot pay the loan because of a loss of job, an illness, or any other financial hardship, delaying the loan payment is not a solution.It is only a band aid on cancer so to speak. It will take years for them to recover because some of the situation is out of their hands.

The best solution to the current mortgage crisis is the same solution that was initially suggested to GM when they were in trouble...file for bankruptcy and reorganize. Unfortunately, an individual has less rights than a corporation...They are not allowed to seek the same relief for their primary home (or student loans for that matter). The opportunity to do this was turned down by a narrow margin in Congress last year.

The solution is called a "Cram Down". Until we allow a person who is suffering from a serious financial setback to "reorganize their life", we only push back the pain to a later day. The job loss, the illness, whatever the situation, even if the personal situation is temporary, the mortgage crisis itself needs a more aggressive solution.

The Cram Down would provide that solution...not a forbearance. The Cram Down reduces the amount a person owes to the current actual value of the property.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.