Neel Kashkari on the very few housing winners.

Since the housing downturn that began in 2007, policymakers in both parties have implemented numerous programs to modify loans and help homeowners avoid foreclosures. Sadly, none of these programs has lived up to its goals. With each missed expectation, advocates identified the next impediment and offered the next silver bullet. But there is a reason all these programs have fallen short — and why in-kind successors will, too.

When I worked in the Treasury Department, my colleagues and I evaluated hundreds of mortgage modification proposals and started several. At the same time, Congress and several states put in place their own plans. Hope Now. The rate-freeze plan. Hope for Homeowners. The basic thesis behind such programs is that foreclosures are very costly to everyone involved: Tens of thousands of dollars are needlessly poured down the drain when a house goes through foreclosure. A bank’s recovery on its loan is severely impaired. Homeowners are out on the street. Neighborhoods are blighted. If, however, a compromise is reached, everyone wins: Banks recover more, families stay in their homes and neighborhoods are strengthened. With so many different modification programs, why haven’t more struggling homeowners been helped?

Full article here.