In earlier an Bailout post, I commented that it seemed that people were not taking advantage of government mortgage restructuring programs because they were waiting for something better. Following up on this topics is this quote from the New York Times article, Breaking Up Is Harder To Do After Housing Fall.
“Most of the lenders around here are in complete disarray,” Mr. Hennenhoefer said. “They’re not as aggressive about evictions. Everyone’s hanging around in properties hoping the government will buy all that bad paper and then they’ll negotiate a new deal with the government. They just live in different parts of the house and say, ‘We’ll stay here for as long as we can, and save our money, so we have the ability to move when and if the sheriff comes to toss us out.’ ”
This quite would seem to bear the idea out. What happens though when everyone stops paying? What if there are no further bailouts?