[The data] illustrate the fundamental flaw in the notion, widely embraced, not least by the Obama administration, that loan modification is salvation for troubled homeowners, beleaguered builders and lenders. Bull, says Mark [Hanson of Hanson Advisors].
"Loan mods," he contends, are designed to keep the unpaid principal balance of the lender's loans intact while re-levering the borrower" and are worse than all those horrors concocted by mortgage bankers during the bubble.
Mortgage modifications, he thunders, turn "homeowners into underwater, overlevered renters for life, unable to sell, re-buy, refi, shop or save. They turn homeowners into economic zombies."