Loan Modification

Readers may have taken note that the Treasury has launched a son of HAMP, its ineffective program to get banks to provide undertake mortgage modifications, called 2MP.

As far as I can tell, 2MP is a farce. It is simply another back door way to recapitalize troubled banks. Mike Konzcal performed a simple analysis of the portfolios of the biggest second mortgage holders, Bank of America, Citi, JP Morgan, and Wells, and using conservative loss assumptions, estimated the gang of four had a total $150 billion hole on their balance sheet among them.