Like previous FHFA analyses, the most recent data predicted that loan forgiveness would create new costs for the taxpayer- funded firms by encouraging defaults among borrowers who owe more than their homes are worth but who have kept making payments anyway. Three out of every four underwater borrowers with GSE loans are current.
Point is, bailing out some debtors at the expense of others shifts costs but does nothing else. And those burdened with additional costs are the same folks as the defaulted borrowers except they’re still paying back what they borrowed. To take more from them while rewarding their non-paying peers stimulates the “chump factor”, wherein a normal human being realizes he’s being played for a fool, quits his job and tells society to f’ off. Bad for the nation, as a rule.