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Mark Zandi on Housing: More Heroin Damn It

The junkie is having a Jones Attack! The federal government should enact more loss-mitigation tools to thwart another housing downturn that could erupt from falling home prices and risks tied to 14 million underwater mortgages, analyst Mark Zandi with Moody's Analytics said Monday. We never got out of the downturn you jackass! The banks are still holding notes, including HELOCs and Seconds, at unrealistic valuations. Home prices are still too high and credit standards are still too low. Fraud is still endemic in the process from top to bottom, including notes that are not really where they are represented to be. Zandi said another housing downturn is possible. He envisions a dangerous scenario where plummeting home values would push more borrowers underwater, causing them to choose a strategic default over paying their mortgage. Everyone who is underwater and has a non-recourse loan should seriously consider a strategic default right now. They should see an attorney and a tax accountant and determine if this is the correct course for them to take with only one concern - whether it makes business sense to do so. Bailouts don't work. They simply transfer the liability from the bank or MBS holder, who should have it to the general public - that is, the taxpayer. They do not resolve the problem. This crap has to stop now and those advocating it must be run out of town on a rail. Discussion below (registration required to post)

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