Speakers Say Hasten Foreclosures, Don't Delay Them.(Managing REO)

Byline: Lew Sichelman

Park City, UT-Though well intentioned, the government's plan to end the housing crisis is missing the mark, a pair of economists said here at the recent annual Midwinter Housing Finance Conference.

John Burns, a Southern California consultant, and Larry Miller, a real estate professor at the University of San Diego, took on the effort to stem foreclosures, saying, in Mr. Burns' words, that "it won't help much."

Noting that 600,000 foreclosures a year are normal in even the best of times, the founder of John Burns Real Estate Consulting, Irvine, Calif., told the conference that the number of repossessions will run at an annual rate of 2.5 million through 2012.

Mr. Miller said only 10%-15% of those homeowners who are in imminent danger of losing their homes can be helped by the Obama administration's plan to rework their loans. Most people won't qualify because they have lost their jobs, gone through a divorce or are too far underwater, he said.

Besides, he added, "Some people are not destined to be homeowners."

Rather than slow down foreclosures that are all but inevitable, they should be speeded up, Mr. Miller said. "Foreclosures are actually a way out" of the current housing conundrum.