Counterpunch: The swelling backlog

Writer claims that US government programmes to 'help homeowners' (i.e. to maintain mortgages as 'performing' loans) were simply stalling devices - they staunched the flow of foreclosed houses onto the market while the real action ticked away elsewhere. The real action was the stealth bailout of banks (slow and stealthy, disguised as helping borrowers to avoid the howls of protest that followed the TARP bailout) in which the Fed transferred $1.25 trillion to bank reserves in exhange for non-performing loans and MBSs. Now the banks are stuffed with reserves they no longer need to play the game of dribbling foreclosures onto the market. They can open the spigot and let the HPC take its course.