Apparently the edit board still has not heard about it. It has an editorial today about the failure of the "Hope for Homeowners" housing bailout. At one point it argues that the main cause of foreclosure has shifted from mortgage resets to job loss. This is wrong, wrong, and wrong. The main cause of foreclosures is that people owe more than the value of their home because their home has fallen in value. If house prices had continued rising then neither a mortgage reset nor job loss would lead to foreclosure, since people could borrow against the equity in their home to meet their mortgage payments. With close to 20 percent of all mortgages underwater, it is virtually certain that there will be a large number of foreclosures over the next two years.
--Dean Baker
