"The lenders may have compelling reasons not to find new borrowers to help, according to the study. For example, up to 45 percent of borrowers who did receive some kind of help on their loans ended up in arrears again, the study found. Conversely, about 30 percent of delinquent borrowers are able to fix their problems without help from their lenders."
http://www.boston.com/business/articles/2009/07/07/lenders_avoid_redoing_loans_fed_concludes/?page=1
so ... if 45% of the folks are going to default anyway and 30% are going to fix their issues anyway ... why should we be bailing these homeowners out? private companies that are interested in make a profit (oh no! PROFIT! they might want to pay their employees???) don't see this as a good investment, why should tax payers?
45% are going to abuse the system no matter what we do - why give them more taxpayer dollars??? maybe they're not abusing the system. maybe they're honestly struggling. but that means they need to make some fundamental changes to their lives to fix the problem and propping them up doesn't help them long term and doesn't help america long term.
30% are going to manage anyway; i'm sure the money would be helpful to them and they would appreciate it - but SO WOULD I. we all struggle to balance our budgets (well, except for the government because they still think they can raise taxes when they need more money ... i wish i could just give myself a raise whenever i needed more money!) and sometimes make bad decisions. we take responsibility for it and fix it ourselves ... we don't expect taxpayers to bail us out.
by my calculations, that leaves 25% that may benefit from assistance. 25% that may be struggling through a divorce or medical bills and need more than 6 months to get their lives in order (or completely fall apart). these folks probably should get some help but the help should come from family and friends and community, not tax payers.
family, friends, and community are close enough to see when their contributions are helping a situation and when they start enabling a situation. they're also close enough to do something about it if the family starts struggling with that line - provide advice, counseling, modify support so it helps but doesn't enable.
but family, friends and community need less money going to taxes so they can support each other this way.
-s