How to end housing mess


Source: Robert Kuttner, Boston Globe ( Free Registration )

In most U.S. cities, housing prices are falling again. They were down in 18 out of 20 metropolitan areas in December, according to the Case-Shiller index released Tuesday. The Boston metro area did “better’’ than most — down only 0.8 percent over the previous year. That’s bad news for the economic recovery, the financial system, and the American middle class. There are solutions that could restore a normal housing market — but political gridlock and the influence of the financial industry is keeping them off Congress’s agenda. Today, about one home in three carries a mortgage worth more than the underlying property, and some 7 million homeowners are at risk of foreclosure. The banking system is reeling under the weight of non-performing loans and depressed mortgage-backed securities.

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