Here is an interesting New York Times editorial regarding foreclosures.  Please note that I don’t necessarily agree with many of the recommendations, but the editorial does a nice job of summarizing some of the problems:

“Solving” our residential real estate problems is going to be most difficult, in my opinion.  It is a very complex issue with realms of complexity that are not understood.   Once you add politics, as well as the emotional factors inherent in residential real estate, the issue becomes frightful.

Recently I read someone say that the only way for the housing market to recover is to let prices fall to a point where the market would “clear itself,” so to speak.  It might well come to that – but I’m afraid that the “market clearing price” (on an all things considered basis at some point in the future) would be much lower than anyone would care to imagine.