HOPE NOW: 545,000 Subprime Borrowers Aided in Second Half of 2007

CUT--wait a minute, prime? By these numbers, this looks to be only slightly more than half a "subprime crisis". Ok, continuing:

The rather dramatic increase in loan modifications is also a very good thing — that being said, out of the 869,000 prime and subprime borrowers helped in the last two quarters of 2007, HOPE NOW reported that 652,000 represented repayment plans.

While repayment plans are certainly an important part of the toolbox in loss mitigation, a heavy reliance on repayment plans could end up costing both investors and servicers dearly later on, as HW reported in an earlier story.

Ah, so that's the catch: most of this is postponing the inevitable. To be fair, the lenders and bankers are betting that Americans will become wealthier and more able to afford their inflated mortgages in a few years down the road. Their optimism is almost heart-warming. Unfortunately, it's pretty insane, or disingenuous -- for that to happen, it would require bucking a trend that has been going the other way since the late 1970s... and which has been accelerating since about 2001.