By Arnold Kling
I have written,
As difficult and painful it may seem in the short run, it probably would be better to work through the foreclosure process and let prices adjust to levels that bring supply and demand into balance in the housing market than to prolong the state of imbalance and uncertainty by trying to prevent foreclosures.
What we need is an honest housing market, with legitimate owners, legitimate renters and prices that balance supply and demand. Loan modifications undermine the honesty of the market. They delay the necessary adjustments. With foreclosures, it might take two years for the housing market to find a bottom. With loan mods, it will take at least ten years.
That is from December 10, 2008
If policy makers had done nothing about the foreclosure crisis, it would be mostly behind us. Instead, it is mostly in front of us.
That is from November 30, 2009.
Concerning the latest attempt to intervene to prevent foreclosures, what more can I possibly add?