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 New Fox star, 23, misses first day after car troubles. Iran's supreme leader makes first public comments since ceasefire. Man accused of killing his daughters might be dead. Her blood isn't compatible with anyone else's. Report an error