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" It's time to pull the bandage off America's foreclosure problem. The economy is ready to emerge from its recent dark period, but to make it happen soon we need to speed the resolution of millions of troubled home loans. Six years have passed since the crisis began, yet instead of accelerating, foreclosures have slowed. "

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" Too-easy credit and millions of bad loans made during the U.S. housing bubble paved the way for the financial calamity and Great Recession that followed. Today, by contrast, credit is too tight. Mortgage loans are particularly hard to get, creating a problem for the housing market and the broader economy. "

Mark Zandi

Today

Problem

Great

" Lenders look at potential borrowers from many angles before extending credit: How much of its income will a household need to put into debt repayment? How large is the down payment? Does the borrower have a job with a stable income? What is the borrower's credit score? "

" Buying a home wouldn't make much sense if house prices were likely to decline further; no one wants to catch a falling knife. "

" The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses. "

" The Obama administration deserves credit for quickly ending the housing free fall. In particular, Obama empowered the Federal Housing Administration to ensure that households could find mortgages at low interest rates even during the worst phase of the financial panic. "

" It is time to move on. House prices won't rise and the economy won't fully engage until more distressed properties are resolved and put back into ordinary use. "

Mark Zandi

Move On

Back

" It is hard to be enthusiastic about the economy's prospects when house prices are falling: Households spend less, small business owners can't use homes as collateral for loans and local governments are forced to cut jobs and programs as property-tax revenue disappears. "

" A housing renaissance has begun. This may be hard to believe after the dizzying, six-year-long crash in home sales, construction and house prices. But housing turned the corner last year, and it will take off in 2013. "

" No one should expect the value of their house to appreciate quickly - counting on your home to be a significant part of your retirement saving isn't a winning strategy - but it is reasonable to expect that prices generally will rise with at least the rate of inflation for some time to come. "

" In a forbearance, the homeowner pays interest and principal on a smaller mortgage, at least for a time, but still owes the full amount. The lower monthly payment helps with affordability, giving stressed homeowners a break. "

" It is easy to be pessimistic. These are extraordinarily difficult times, and the collective psyche is teetering. But we are closer to righting the wrongs that got us into this economic mess than most of us believe. "

" The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. "

" There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren't among them. "

" Now, I do think when we move into 2012 and '13 when, presumably, the economy is on firmer ground, I would allow the tax rates for upper-income individuals to revert back to where they were before the cuts in the 1990s. I think at that point it makes perfect sense. "

" Potential home buyers have a two-step decision process. First, they determine whether they can afford to make a purchase - does their income safely cover their mortgage payment? Then they determine whether owning is a better financial choice than renting - are the costs of owning a home lower than the cost of renting it? "

" We need to get rid of the debt ceiling law. It's anachronistic and it's a problem. "

" Housing was ground zero for the Great Recession. Between early 2006 and Obama's inauguration in 2009, average house prices fell by a third across the country. In certain areas, including cities as diverse as Akron, Orlando and Las Vegas, house prices fell by more than half. "

" Yes. I don't think it would be appropriate at this point to raise taxes on anyone, certainly not in 2011. "

" They called me the sexiest economist in America, and that was years ago, when I had hair and body mass and my teeth were shiny. "

Mark Zandi

America

Teeth

" Indeed, the FHA was born out of the Great Depression, which was also caused in significant part by a foreclosure crisis. Mortgages in the early 1930s were mostly three- to five-year 'bullet' loans, which did not amortize and were due in full at maturity. "

" Investor demand for distressed property has been healthy, as rents rise to levels that can cover investors' costs while they wait for properties to appreciate. Giving investors a small tax break should further juice up demand, supporting prices for distressed homes and the market in general. "

" It has become fashionable to rail against government intervention in the economy, and the FHA is a favorite example by those trying to show the government's overreach. In reality, the FHA shows how government action during the Great Recession forestalled a much worse economic fate. "

" Our biggest challenge is to eliminate the popular perception that economists don't have anything useful to say. "

" The Tea Party was born out of the disgust many Americans felt early in the financial crisis upon learning that the federal government was even contemplating reducing the principal on some troubled mortgages. "