"History is a wonderful thing, if only it was true"

Saturday, January 02, 2010

Unintended Consequences

Not allowing the market to clear just prolongs the problem

Mortgage Modifications Are Seen as Adding to Housing Woes - NYTimes.com

"Only after banks are forced to acknowledge losses and the real estate market absorbs a now pent-up surge of foreclosed properties will housing prices drop to levels at which enough Americans can afford to buy, he argues.

“Then the carpenters can go back to work,” Mr. Katari said. “The roofers can go back to work, and we start building housing again. If this drips out over the next few years, that whole sector of the economy isn’t going to recover.”

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