Bad Numbers

Washington Post (02/26/08) P. A16
A new Moody's Economy.com report revealing that about 10.3 percent of U.S. homes are now worth less than what the mortgage-holders owe on them is the latest sign that the mortgage crisis continues to grow. Project Lifeline and the HOPE NOW Alliance suggest that the Bush administration is seriously concerned that the mortgage problems could continue to spread; but loan modifications have been slow to gain momentum, as servicers are short-staffed and borrowers are avoiding the calls and letters of creditors. Nonetheless, according to the editors of the Washington Post, loan modifications offer the best solution to the subprime mortgage crisis because they benefit consumers at the least cost in federal dollars and broken contracts. The mortgage industry and the Bush administration will have to show that these initiatives work, the editors insist, or Congress will have to pursue legislative remedies to keep people in their homes.