Comments on: What You Need To Know About Foreclosure Bailout http://www.thenationalmortgageexpert.com/learning-center/foreclosure-learning-center/what-you-need-to-know-about-foreclosure-bailout/ Your Source For Mortgage Tips And Insider Secrets Wed, 02 Jun 2010 15:16:33 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Dave Sanford http://www.thenationalmortgageexpert.com/learning-center/foreclosure-learning-center/what-you-need-to-know-about-foreclosure-bailout/comment-page-1/#comment-27 Dave Sanford Sun, 26 Oct 2008 12:35:07 +0000 http://www.thenationalmortgageexpert.com/?p=939#comment-27 My concern is that the economy will stay bad until there is liquidity in the housing market. Most of the proposals I see to address that try to help people keep prices at the last sale value which is artificially inflating prices over the current market clearing amount. The Economist had an article on this: http://www.economist.com/finance/displaystory.cfm?story_id=12470547 which cites Luigi Zingales - Plan B paper. http://faculty.chicagogsb.edu/luigi.zingales/research/PSpapers/plan_b.pdf It not only has a proposal based on things that have been done before, to avoid foreclosures while lowering house prices to the market rate, but also addresses the connectivity risk between banks and other financial institutions. Anyone interested in thinking carefully about future economic policy should read Zingales' Plan B paper. My concern is that the economy will stay bad until there is liquidity in the housing market.

Most of the proposals I see to address that try to help people keep prices at the last sale value
which is artificially inflating prices over the current market clearing amount. The Economist
had an article on this:

http://www.economist.com/finance/displaystory.cfm?story_id=12470547

which cites Luigi Zingales – Plan B paper.

http://faculty.chicagogsb.edu/luigi.zingales/research/PSpapers/plan_b.pdf

It not only has a proposal based on things that have been done before, to avoid foreclosures
while lowering house prices to the market rate, but also addresses the connectivity risk
between banks and other financial institutions.

Anyone interested in thinking carefully about future economic policy should read Zingales’ Plan B paper.

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