Here Is Larry Summers' Plan For Fixing The Housing Mess

Lawrence Summers

Larry Summers argues in an FT editorial that there won’t be any economic recovery without a housing recovery, and there won’t be a housing recovery without policy changes.

In short his policy suggestions are:

  • GSEs should lower credit standards for homebuyers
  • GSEs should take advantage of record-low rates
  • GSEs should finance mass sales of foreclosed properties to those prepared to rent them out
  • GSEs should be open to experimentation with principal reduction strategies on the local level
  • FHFA should quickly resolve its dispute with the banks
  • And two optional proposals: Bank regulators could change the way banks deal with second mortgages and underwater loans. The Federal Reserve could expand purchases of mortgage-backed securities

Read the full thing at the FT >

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