The Cato Institute makes an interesting point: Why are Obama's efforts at reducing home mortgage foreclosure failing? Because, "All efforts addressing the foreclosure crisis implicitly assume that the current wave of foreclosures is almost exclusively the result of predatory lending practices and 'exploding' adjustable rate mortgages, where upward shocks on the rate reset cause mortgage payment to become unaffordable. This was true of former Treasury Secretary Paulson's HOPE NOW and of FDIC Chairwoman Sheila Bair's IndyMac models. The Obama administration's current foreclosure efforts are based on the same mistaken belief."
In fact, "The vast majority of mortgage defaults are being driven by the same factors that have always driven mortgage defaults: being 'underwater,' that is, you owe more on the mortgage than the home is worth, combined with a life event that results in a substantial income decline, such as a job loss. Until both of these pieces are addressed, foreclosure levels are unlikely to fall."