This past October, the Obama administration proposed a new plan to help distraught homeowners. The key to the new proposal was to get lower-interest mortgages into the hands of folks living in devalued homes.The proposal was not without withering criticism, most of it from pundits who don't believe the plan gets to the root of the housing market problem: underwater mortgages.The new policy likely will not have much of an impact on the housing market or the broader economy, reported Ted Gayer, co-director of the economic studies program at the Brookings Institute. If one is looking to stem the tide of foreclosures, he said in press reports, this new plan doesn't get at the underlying problem: that a quarter of all mortgages are underwater.A better, more radical plan has come forward from an...
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