The current economic tailspin started largely with housing (or more specifically with housing finance) and housing will likely be the path back to prosperity. Stabilization of housing is a noble ideal but it will prove difficult because of the fractured relationships involved in most mortgages. For the most part, homeowners have little or no relationship with the lender after the loan is closed and usually even less with the servicer. Perhaps it's time to shift mortgage lending back to the local community lenders away from the behemoth banks.
Apparently the days ahead will bring details of the government plan for housing. In reality, only a small percentage of the homeowners currently "underwater" (their mortgage debt exceeds the house value) can be salvaged. For the main, consumers over-bought and over-borrowed . Even with very low mortgage rates they still have too much debt.
On the good news side- market bottoms are being formed in many of the hardest hit areas and market activity is increasing . Stay tuned.
