Economy: Power Struggle Behind the Foreclosure Crisis
• "Though the public uproar over botched home foreclosures has focused on sloppy and often fraudulent paperwork, a much bigger battle is underway behind the scenes over how much more the banks should be helping troubled homeowners," CongressDaily (subscription) reports. "Consumer groups and state attorneys general around the country are seizing on the foreclosure mess as a way to pressure the nation's banks into making bigger and faster concessions on mortgages for millions of delinquent borrowers who want to stay in their homes."
• "Two top U.S. Federal Reserve officials gave competing views on the need for more monetary stimulus to the U.S. economy, continuing a public debate over further easing even as the core view at the U.S. central bank appears to favor such a move," Reuters reports.
How much further can the housing market sink? When will it begin to rebound?
Home prices have plunged by about one-third since the peak of the housing bubble, according to the S&P/Case Schiller composite index of 20 major cities. Sales of new and existing homes slumped again after the expiration of the homebuyer tax credit. And on Monday, CoreLogic reported that 22.5 percent of residential properties were underwater in the third quarter, meaning the mortgage was higher than the property's resale value. All this at a time when the Federal Reserve has pushed mortgage interest rates down to nearly all-time lows.
What is holding the market down, despite cheap money and often fire-sale prices? Is there anything more the government can or should do?
-- Edmund Andrews, NationalJournal.com
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