The housing recession the worst in US history and worsening every day will eventually see house prices fall by more than 20 , with millions of Americans losing their homes.

They might also hope for a housing program that finally addresses America s foreclosure crisis.

The Right Weights for Mortgage Risks

Occupy the Mortgage Lenders

So far, the sub prime crisis has had a limited direct impact on Latin America s mortgage markets.

Losses are spreading from sub prime to near prime and prime mortgages, commercial mortgages, and unsecured consumer credit (credit cards, auto loans, student loans).

Mortgage debts, too, must be written down.

After the subprime crisis erupted, mortgage and consumer debt was paid down by households either with their savings or by default.

Mortgages became more widely available.

Mortgage brokers were happy to get in on the act.

It was called securitized mortgages.

Unlike virtually every other country, US residential mortgages are effectively no recourse loans.

Indeed, the foreclosure rate is increasing.

The problem was not just sub prime mortgages.

Moreover, the US housing market appears to be stabilizing....Overall, the US mortgage market has remained resilient, although the sub prime segment has deteriorated a bit more rapidly than had been expected.

a rapid reduction of insolvent households debt burden, preceded by a temporary freeze on all foreclosures

As a result, mortgage brokers maximize their income by generating larger volumes of mortgages, as do the banks that package these loans into mortgage backed securities (MBS s).

In Mexico, all mortgages carry fixed interest rates, unlike the infamous exploding ARMs that left US homeowners ruing their choice of adjustable rate mortgages when interest rates rose. Mexican mortgages are indexed to inflation, but the state mortgage agency links that index to the minimum wage and makes up the difference if mortgage interest adjustments for inflation outpace wage growth.

But mortgage markets remain underdeveloped in most emerging economies.

What is needed is a quick write down of the value of the mortgages.

In the fourth act, the real estate bubble will burst.

Its members could not agree even on how to define subprime mortgages and calculate how many such mortgages there were in the United States at the time of the crisis.

In other words, modern government finance had come to resemble sub prime mortgages, which created the illusion of universal home ownership rules and limits no longer applied.

The state is an epicenter of the housing bust and the foreclosure crisis.

Around sixty sub prime lenders have already gone bankrupt.

Some limited previous experience with mortgage modifications is not encouraging.

Wall Street has polluted the economy with toxic mortgages.

Sub prime mortgages made the American dream come true.

One place to start is the tax deduction for interest payments on home mortgages.

The sub prime crisis has exposed serious problems that we must address.

Reducing the face value of mortgages and providing the upside in case home prices were to rise in the long run to the creditor banks is another way to convert mortgage debt partly into shareholder equity.

Many banks have already acknowledged their open ended losses in residential mortgages.

The terms of mortgages need to be adjusted to the homeowners ability to pay.

But, in America s home mortgage market, this is much less common.

In this way, the Fed contributed to creating the sub prime crisis.

In November 1699, William finally recommended that Parliament pay the mortgage debt to George, and in early 1700, the debt was honoured.

But it is the economic slowdown that renders all developed countries less resistant to the financial shocks resulting from the sub prime problem and from the mixed loan packages that are then used to dilute the risks attached to sub prime debt.

German banks grant mortgages only to a maximum of 60 of the value of a house, instead of the 100 mortgages that were frequently seen in the US and United Kingdom.

Thus, although delinquency rates have risen slightly in Mexico since the mortgage market was created in 2003, only about 5 of mortgages are between 31 and 60 days late. Only 2 are between 61 and 90 days late.

In particular, they should have paid greater attention to the sustainability of US mortgage and consumer debt.

This, of course, is just the story of subprime mortgages in another guise.

Third, government could assume part of a mortgage, taking advantage of its lower borrowing costs.

A weaker economy means more bankruptcies and home foreclosures and higher unemployment.

Small wonder that when the sub prime market blew up, these markets also froze.

When normal mortgages did not prime the pump enough, he encouraged them to take out variable rate mortgages at a time when interest rates had nowhere to go but up.