The housing market will never find it’s true bottom unless the gubmint stops reinflating the bubble.
Allowing refinancing up to 125% loan value is another typically Obama-Fwank moronic thing to do.
The people getting the 125% will not pay off their mortgage. They will buy lots of new stuff, go out to eat, go on vacation, etc.
I have seen this happen over and over for years, now. Every time these types are allowed a refi, they just go deeper into debt. I just heard about someone who deliberately set a fire to gut a house where they were behind in the payments. They got a huge insurance payout, upgraded everything by 100% or more, bought toys and ended up deeper in debt. They are on the 4th reiteration of this game and just never learn or want to.