As you have seen in the news a number of banks have settled with a number of attorneys general to resolve issues related to the mortgage meltdown mess.

Now I am not going to say that a 26 billion dollar plan is nothing but let’s do a little math here.

To begin with the reports I am hearing say it will take 1-3 years before anyone starts getting money or modifications, not a big help to those in trouble today.

Second, let’s run the numbers.

Now a portion of the money will go to people who have already been foreclosed on. Nice for them but not much help to those in trouble now.

Second, let’s assume that say 25 billion goes to modifications and principle reduction.

If you take 25 billion and divide it by 25,000 that works out to a million homeowners.

Right now betwen 10 and 15 million are underwater, so the plan is going to help, at most, 10% of them.

And in many places, 25,000 is a drop in the bucket. If you have a house that is worth 150,000 and you owe 300,000 then reducing things to 275,000 is not exactly a big deal.

And this of course ignores all of the issues relating to the benefits the banks are getting from this and the fact that responsible homeowners who are struggling to stay current will not be helped.

Nor is this plan good for retirees who have their pensions partly invested in mortgages.

I am not suggesting that this isn’t a nice step, or for that matter that there is really any reasonable plan that would help resolve the problem, I’m just tired of people in the media or the government trying to act like it will.