Dr. Richard Green, Director of the USC Lusk Center for Real Estate, is quoted in the March 6, 2009 edition of The Globe and Mail:
Dramatic moves to stem the tide of desperation
The Globe and Mail, March 6, 2009
By Kerry Stirton
"...These policy advocates argue that a better solution, and one that would help mortgage holders while injecting a $200-billion-a-year stimulus through consumers, would entail setting a spread limit on residential-mortgage rates of 160 basis points over the yield on 10-year Treasury Bills. In that way, the intensive applications process and slow paperwork of the administration's program would be avoided, new buyers would enter the market to sop up excess supply and stabilize prices almost immediately, and the program would extend to non-federal borrowers, thus having larger impact. This is evidently a grand plan; profoundly structural.
Other discrete criticisms focus on the fact that the administration's plan does not require mortgage servicers to reduce the loan principal to 38 per cent of a person's income, it merely allows for it in modest amounts. Richard Green of the Lusk Center for Real Estate at the University of Southern California is of this view, arguing that immediate writedowns of principal for underwater homeowners would stabilize the situation more quickly. "
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