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Thursday, March 27, 2008

How to Fix The Mortgage Mess

We've always admired Daniel Gross, Slate's Moneybox columnist and resident Bubbleologist. The guy is everywhere. In this Q&A, which first appeared on, he takes readers' questions on the mortgage crisis. His best idea? Creating a New Deal-style federal agency that would buy up foreclosed properties and slowly sell them off:

One possibility would be something like a Resolution Trust Corp. (from late 1980s or early 1990s) that would buy up the bad debt and take ownership of foreclosed properties—and work them out or sell them over time, rather than dumping them on the market en masse as is being done today. The way the foreclosure dynamic works in the private sector, there's no way the lenders can handle the sort of one-on-one negotiations necessary to modify mortgages, etc.

[Photo credit: Russ Abbott]