Don't Be Afraid of the 'F' Word By Kevin Spak Posted Jan 31, 2009 10:07 AM CST Copied A sign of a house under foreclosure is shown in Antioch, Calif., Thursday, Aug. 14, 2008. (AP Photo/Paul Sakuma) Foreclosures have gotten a bad rap lately, with politicians desperate to prevent them. But foreclosures actually represent one of the best paths to recovery, writes real-estate consultant Ramsey Su in the Wall Street Journal. The people facing foreclosure would be much better served walking away from the negative-equity McMansions destroying their balance sheets. Credit scores can be rebuilt. Credit markets, meanwhile, will balk at any loan modification, thanks to what now looks like a flawed securitization model. Holders of junior tranches simply have no incentive to agree to a modification. Besides, “loan modification is not only ineffective, it is evil,” Su writes. “Coercing borrowers to continue paying a mortgage on a home that is hopelessly overvalued…is predatory lending.” Read These Next Gavin Newsom has filed a massive lawsuit against Fox News. New York Times ranks the best movies of the 21st century. A man has been deported for kicking an airport customs beagle. White House rolls with Trump's 'daddy' nickname. Report an error