BUILDER Online's Housing Headlines

“The best response to the housing bubble would have been regulatory, not monetary,” Bernanke said in prepared remarks to the American Economic Association’s annual meeting. The Fed’s efforts to constrain the bubble were “too late or were insufficient,” which means that regulatory actions “must be better and smarter,” he said.

Freddie also has one of the world’s highest-paid human resources executives. Paul George’s total compensation can run up to $2.7 million. It must require a rare set of skills to spot executives capable of losing billions of dollars.

For all the talk of the housing bust, San Diego County’s median price ended the decade up 48.4 percent from 2000.

The Florida Supreme Court ordered local judges this week to adopt a uniform mediation program to help pare down nearly 450,000 current foreclosure cases clogging the state’s courtrooms.

“That is what I would call the most unexpectedly crazy thing,” said Chris Thornberg, a real estate expert with Beacon Economics in Los Angeles. “There’s no reason the market should have bounced back as fast as it did. You look at historical bubbles, they never bounce back this fast.” Where did the surge in prices come from? “The answer is government intervention,” Thornberg said.

Lenders are guilty of having “manipulated” the housing market during the boom by accepting dubious appraisals, Mr. Figg says. “When I weighed everything,” he says, “I was able to sleep at night.”

The Mess is the product of The Story, the fable that waterfront living beyond winter’s reach exerts such a powerful pull that it justifies almost any price for housing. The Story propelled the orgy of borrowing, investing and flipping that dominated life here and in other places where January doesn’t include a snow blower. The Story lost its magic amid the realization that speculators had simply been selling to other speculators, making the real estate market look like a Ponzi scheme.

Like so many of the thousands of foreclosures happening throughout the state and nation, the Marshalls’ tearful move follows months of confusing back-and-forth in a system that’s overwhelmed by mortgage defaults.

“I think that if you go back and look at what we said we would do in February, we are on track to meet the president’s goals,” said Michael Barr, an assistant Treasury secretary who helps oversee the nation’s main modification program. “We are not going to be able to prevent every foreclosure in the country.”

Some mortgage insurers and lenders are beginning to relax their down-payment requirements, in a sign of increased confidence in the housing market. The changes, which are being done on a market-by-market basis, mean buyers in some parts of the country can now borrow 95% instead of 90% of a property’s value. Until recently, mortgage companies had tighter standards for these markets because of falling home prices.

“It is my dream,” their father said about getting the townhouse. “For 10 years, I have been struggling to get a house.”

The real estate agent suggested an FHA 203K Streamline Mortgage, which allows a buyer to purchase a house and obtain up to $35,000 more for renovations. “It seemed like the answer to everything,” Felton said. As it turned out, it wasn’t.

Tim Iacano authored an interesting piece recently about how the recent rise in residential housing closely matched the tax credit amount and raised concerns about what happens to prices once the tax credit is removed in April. I would add to this that the rising interest rates, which are inevitable and have already begun, will have an even greater effect.

The past year’s progress in the housing market has relied on government programs that are scheduled to be phased out. The commercial real-estate market is faced with huge amounts of unoccupied space and a deluge of defaults and foreclosures that are putting new stresses on banks and other financial institutions that already are on life support.

But if you’ve been thinking of buying a home to live in, the current meltdown is a big opportunity.