An otherwise useful article in the NYT on the surge in foreclosures in prime mortgages never mentions the collapse of the housing bubble. Of course, the crash of the bubble was central. If the problem was just unemployment, then many people would be able to draw on the equity in their home to get through a spell of unemployment, or alternatively they would sell their home and pocket some money, rather than losing it through foreclosure. Job loss is obviously an important factor in many foreclosures, as this article points out, but the decline in house prices is at least as important.
--Dean Baker
