The price of housing has fallen, and fallen a lot. The final value will be determined by nothing more than the price someone is willing to pay for the property. Right now, large mortgage lenders are making money by getting cheap money from the government and investing it, not lending it. They are not lending as the TARP plan was intended. It’s hard to blame them when they are paid by the government whether they lend money or not.

If mortgage lenders and homeowners can work out an agreement that is beneficial to both, good. Government intervention has done nothing to date. They have essentially limited the money available for lending with their meddling. That’s the part the government is playing in artificially dropping prices. What’s your prediction on what it will do now? With this plan?

My final remark in the post is that the market will make the adjustment in the end. All the government intervention is for the benefit of special interests and has had no positive affect on the housing crisis or economic conditions.

We have gone through cycles like this before and unless human nature changes, we will again.

Thanks for the post.