Key to Recovery: Fix Housing, and Jobs Will Follow

In the conventional wisdom, there is nothing President Obama can do to put Americans back to work in large numbers. He is a president supposedly held hostage by vengeful politics, holed up in a White House surrounded by lunatics and impotent hacks, with congressional combat rendering meaningful action impossible.

Nonsense. There is one thing the president can do right now, and largely by himself, if he finds the courage to command people working under him -- not least Treasury Secretary Timothy Geithner: He can help fix the distress in the housing market, which was the immediate trigger for the Great Recession, and which continues to play a major in preventing recovery.
The president can force mortgage companies to aggressively provide relief to homeowners who owe the bank more than their homes are worth, writing down principal balances. He can direct the Treasury, which supervises the administration's mortgage relief programs, to begin wielding serious sanctions against major lenders whose strategic incompetence and opportunistic intransigence have prevented meaningful numbers of troubled mortgages from being modified, keeping millions of homeowners stuck in foreclosure limbo.

The banks have succeeded in delaying and profiteering, collecting fees they levy for appraisals, insurance policies and other services, funneling this business through their own subsidiaries. Foreclosure, it turns out, is a profitable enterprise for many lenders. The Treasury could make it painful, altering the incentives at play for mortgage companies.

For the full story, see The Huffington Post.

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