Letting bankruptcy courts deal with primary mortgages was always the best way to deal with this mess, which is of course why it didn't happen. The administration supported it in theory, but made no effort to get people to vote for it. The HAMP program will ultimately probably do more harm than good.
I gather the basic thinking was that they could blow a little air into the bubble and then wait for the economy to turnaround to catch up and support it. The economy hasn't turned around.
Of course causality goes both ways in these things, and the ongoing foreclosure crisis combined with the Senate failure to act on unemployment benefits means - hope I'm wrong! - the economy is fucked.
