As detailed by Gretchen Morgenson for The New York Times here:
There's no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.
As for the supposed benefits to the economy, skeptics abound. One of them is Paul Diggle, property economist at Capital Economics in London. In a report last week, he rejected the notion -- espoused by both banks and government authorities -- that this deal would help turn around the American housing market.
For most homeowners, it will barely move the needle. Forgiving $17 billion in principal "is a drop in the ocean," Mr. Diggle said, "given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total." Doing the math, $17 billion in write-downs would be about 2.4 percent of the total negative equity weighing down borrowers across the nation now.
