Abandon all Hope all Ye That Enter Here - Dante

The New York Times calls the new program HOPE a lead balloon:

Under the program, the government will insure up to $300 billion in new, more affordable loans for troubled borrowers. For the insurance to kick in, however, lenders must first voluntarily refinance the delinquent mortgages by reducing the loan balances to 90 percent of the home’s current market value.

In exchange, lenders would avoid the expense of foreclosure and uncertainty about being repaid. The government would stem the social and economic damage of more foreclosures, at presumably little risk to taxpayers.

There’s just one problem. At a Congressional hearing in September, lenders were lukewarm about participating in the new program — reluctant, it seems, to take the loss that comes with reducing loan balances.