Time to address mortgages?

Reuters reported in late March that, according to Treasury Department statistics on 34 million mortgages, deliquencies are up 14%.  CBS news reported yesterday that 2010 has already produced 900 thousand foreclosure notices.  Moreover, the White House's modification program has produced less than stellar results, with nearly 3,000 of the subject loans subsequently failing.  See Defaults Rise in Loan Modification Program, New York Times, April 14, 2010.

Which raises the question, has Congress lost the forest for the trees?  While politicians banter about the potential utility of another regulatory agency, the mortgages that are blamed for the lingering economic downturn continue to tumble.  Why not spend some of the astronomical bailout amounts allocated to the financiers on the homeowners themselves?  Plans already have been uttered which would convert a significant number of adjustable rate mortgages into fixed, conventional loans.  Working from the Treasury Department stats (which encompass $6 trillion in principal balances), $8.4 billion would seemingly be needed to bring the 14% of non-performers up to speed.  Even $6 billion would go a long way.

What's the import of $6 billion, you might ask?  That's the TARP money committed to each of 16 entities, each, presumably, too big to fail.  See http://bailout.propublica.org/main/list/index.

---JSC, 4/20/10