...First, from Richard Green at the USC Marshall School of Business and a director at the Lusk Center for Real Estate:
First, many borrowers who were responsible now find themselves in trouble because rapidly falling home prices in some areas have left them with mortgage balances that exceed their house value, because they have lost their job in the midst of a rapidly deteriorating employment market, or both.
The idea of allowing people to refinance into new loans backed by Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) at the current low interest rates--even if the borrowers now have little or no equity--makes a lot of sense to me...