As for the new proposals mentioned, can gov’t really successfully intervene when a life event requires a sale and somebody is 50K, 70k, 150K, 300K underwater? It might produce more modifications outside of the Foreclosure Belt of FL, CA, NV, and AZ, but even heavy spending/intervention is not going to fix someone having paid/borrowed twice as much as a house/lot is intrinsically worth.

http://housingdoom.com/2009/11/05/the-cost-of-not-walking-away-from-an-underwater-mortgage/

“Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis”

Brent T. White
University of Arizona – James E. Rogers College of Law

Abstract:
Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the desire to avoid the shame and guilt of foreclosure; and 2) exaggerated anxiety over foreclosure’s perceived consequences.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1494467

They’re going to keep messing around with this, coming up with ever more useless little programs, trying to hold back the wave. What a fiasco. And of course most people will just say we didn’t do it soon enough or big enough; just like “stimulus.”