Everyone who participated in the Great Housing Bubble wants to go back to the way things were before. That is the problem with Ponzi schemes; once they collapse, you can’t rebuild them. Borrowers were only making their debt-service payments by borrowing more money. When faced with the prospect of paying their debts without continued borrowing, Ponzis can’t do it. Loan modifications seem like a great idea: borrowers resume making payments and get to keep their houses, and lenders don’t have to foreclose and recognize any losses. In other circumstances, this [Read More...]