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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