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.

Indeed, the foreclosure rate is increasing.

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

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

At the same time, several steps can be taken to reduce foreclosures.

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

Indeed, the pace of foreclosures would be set to increase were it not for government intervention.

To prevent housing prices from overshooting on the downside, the number of foreclosures has to be kept to a minimum.

House prices probably will fall further, so there will be more foreclosures, and no amount of talking up the market is going to change that.

Forgiveness of underwater mortgages (where the outstanding loan exceeds the home s current market value), as well as reducing the foreclosure overhang of some 1.5 million homes, must be part of that solution.

Significantly, foreclosures rose 7 month on month in June, and a whopping 32 compared to June 2008.

In the old days, when borrowers found it impossible to make their payments, mortgages would be restructured foreclosures were bad for both the borrower and the lender.

In the US, the protests of 2011 will have a lasting effect only if Occupiers remain organized and continue their work on fighting foreclosures.

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).

Second, job losses will lead to a more protracted and severe housing recession, as joblessness and falling income are key factors in determining delinquencies on mortgages and foreclosure.

The foreclosure relief plan is off to an even slower start, and is likely to run into numerous problems concerning how to rework delinquent mortgages without inducing a lot more delinquencies.

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.

The 2.5 3.5 million foreclosures expected this year will exceed those of 2009, and the year began with what is expected to be the first of many large commercial real estate bankruptcies.

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.

The sub prime crisis has exposed serious problems that we must address. For example, we need stronger consumer protection for retail financial products, stricter disclosure requirements for new securities, and better designed vehicles for hedging risks.

It makes no sense for banks to foreclose on homes when there are workout options whereby people could stay in their homes and banks could recover far more money.

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.

The Bush administration is hoping, somehow, to forestall a wave of foreclosures thereby passing the economy s problems on to the next president, just as it is doing with the Iraq quagmire.

In America, for instance, bad debt and foreclosures are at levels not seen for three quarters of a century the decline in credit in 2009 was the largest since 1942.

In addition, high loan to value ratios in the US interact with household financial problems to increase the number of defaults and 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.

Decreased rates of household formation young Americans, for example, are increasingly moving back in with their parents depress housing prices, leading to still more foreclosures.

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.

Even though 10 of US households with mortgages had already lost their homes, the pace of foreclosures appeared to be increasing or would have, were it not for legal snafus that raised doubts about America s vaunted rule of law.

Given how financially stretched US households are, a good part of this tax rebate may be used to pay down high credit card balances (or other unsecured consumer credit) or to postpone mortgage delinquency.

Around sixty sub prime lenders have already gone bankrupt.

Some limited previous experience with mortgage modifications is not encouraging.

If interest rates rise too far, then the collapse in housing values will lead to large scale foreclosures and a collapse in consumption spending as well.