What a stupid assumption. Just becuase the ARMs are going to reset, how do you know that the bank wont modify the borrower's loan to current home value levels (which they are actively doing now)es? You might as well extrapolate that a future train crashes will kill 100,000 people (if the conductor doesnt stop it from crashing whihc they will) Your assumtion is just yellow journalism trying to scare the public and to read your rehash you call writing..Get a real job Peter

It takes a long time to work through the economic cycles in our economy. The massive unemployments have begun and will continue for quite some time (a year or two?) And as these unemplyed people slowly spend what little savings they may have trying to hold on to their homes, the foreclosure incidents will continue to increase.

Round one of the foreclosures was against those who bought homes that they could not afford. Round two will be against those who have lost their jobs and fall into financial disaster. This will take another year OR TWO (because of the length of the foreclosure process.)

Meanwhile the banks' bad mortgages will continue to escalate for the next year or two. Recovery will simply NOT be possible during that time. The best that we can do is to try to moderate the impact of all of this.

The politicians and the economists all realize (or should realize) what we are in store for in the future; but they can't personally afford to "speak the truth" without being labeled as being "negative".

This is all a systemic societal problem. The economy depends on robust economic activity; but, especially in a defaltionary situation, the vast majority of people simply cannot afford to spend for anything more than their basic needs. We're damned if we do, and if we don't spend . . . the bubbles have just about all burst.

The ONLY SOLUTION that I can see would be to instill INTEGRITY in our business enterprises, and markets; but I don't know if this is possible. it would require an almost wholesale purge of most of our Congressmen; and they aren't likely to do anything that will put themselves out of political office.

As a retired person living on a pension and so far has been immune financially to the financial mess we find ourselves in, I find it interesting that the government only has funds to help the wealthy. To me it would have made more sense to distribute the trillions of dollars to the working class so they could pay off their debts resulting in a trickle up economy. The money eventually would wind up into the large corporations anyway but leaving the working class people in less debt resulting in a healthier economy.

Peter, we are in this situation because the cost of owning a house got out of control. The National Association of Realtors conspired with banks and appraisers to endlessly drive the price of a home upwards. Far beyond what the country could afford.

Many people bought a house because they were afraid that next year they might have to pay $500k for a $200k house. Cities loved the new valuations becuase they were able to revalue the land and jack up property taxes far beyond the level they should have been at.

Housing must fall back to realistic levels. Which means 1990's pricing. Property taxes need to be reduced by 50% in most areas and we need 3.5% interest 30 year loans. The US government also must dissolve the National Realty Association. The group exists for one purpose and one purpose only, to conspire to raise the purchase cost of a home. They have done so since inception and they need to be stopped.

A normal middle class home needs to be affordable for the nomal middle class person. I'm not talking about McMansions. I'm talking about 60 year old 1500sq ft 3 bedroom houses. Right now even those are beyond the affordability index of most workers. Even with a $150k purchase price they will overextend many families because of the insane property tax fixed to them. Many times almost equal to the mortage payment.

Is our gov. so blind or just greedy that they dont understand that if they would thak a look at all peoples mortages and their incomes and help the ones [[[pay their mortage that would help get the economy going ]] if the gov. dont quit giveing the rich our money its not going to get any better it WILL GET WORSE&WORSE.