(HAMP) Dropout Rate Surging in Taxpayer-Funded Mortgage Fix Program - The Obama Administration’s mortgage modification program is seeing an increasing dropout rate, with 96,025 additional cancellations out of payment-reduction trials reported for July – that leaves about 52 percent of the 1.3 million targeted borrowers in either trials or approved status.  In July, the total number of cancellations out of trials in the Home Affordable Modification Program jumped 18 percent, while the number of approved permanent modifications increased 8 percent to 255,934. - eCredit Daily

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(on GSEs and questioning homeownership) Post-Mortgage Meltdown, Where Do We Go Now? - ... "The world we live in today is not quite the world that existed in 1950," he noted. "The nature of households and the rate at which they dissolve and reform, the nature of work and its transient nature across geographies are all things that suggest that maybe, just possibly, a middle-class American shouldn't stake themselves to an illiquid, very large, concentrated, leveraged asset —- that is to say, a house." ... - NPR
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Fannie Mae and Freddie Mac reform: Would it add $5 trillion to US debt? - By Mark Trumbull - The Obama administration held a conference Tuesday about how to reform mortgage giants Fannie Mae and Freddie Mac. Reform could involve adding Fannie and Freddie's roughly $5 trillion in obligations, in effect, to the federal balance sheet. - Christian Science Monitor

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(has a plan)  A housing fix - Entice investors back to MBS mart - By JONATHON TRUGMAN - ... The most important thing is that we need to align the interests of private investors, the buyers of the mortgage-backed bonds, with those of the borrower or homeowner.  A structure that is appealing to investors is the absolute key. The more compelling the investment to the private markets, the less involved the government has to be and the less costly the solution to taxpayers.  The best way to attract investors is to alter the return profile of mortgage-backed bonds by eliminating income tax on the interest income portion on a mortgage-backed bond.  Second, there ought to be an option for borrowers to buy a government guarantee on their mortgage -- an option, not a mandate. ... more ... - NY Post 
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How a homeownership fetish hurt the American dream - By Robert J. Samuelson - The question of what to do about Fannie Mae and Freddie Mac -- the two government-created enterprises that have backed massive loans to the housing market -- involves much more than finance or real estate. It marks the end of an era. The relentless promotion of homeownership as the embodiment of the American dream has outlived its usefulness. - Washington Post

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Housing Slide in U.S. Threatens to Drag Economy Into Recession - By John Gittelsohn and Bob Willis - Housing led the U.S. out of seven of the last eight recessions. This time, it may kill the recovery.  ... “If foreclosures continue to mount and depress home prices, that could send the economy back into a recession,” said Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc. “The housing market and the broader economy are closely intertwined.” ... - Bloomberg 
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(change of heart) Frank: Fannie And Freddie Must Go - Now that he's told us how wrong he was, isn't an apology in order? -  Housing: After years of dissembling and denial, Rep. Barney Frank has finally come out. He now says bankrupt government mortgage giants Fannie Mae and Freddie Mac "should be abolished." Better late than never.  'There were people in this society who for economic and, frankly, social reasons can't and shouldn't be homeowners," ... - IBD Editorial