A new readers requested some advice from you at the HBB. "Hi Ben, I recently came to know your blog and have become a big fan. I bought my condo in Walnut Creek CA in Apr 2005 by stretching myself. So the situation is that this year I will see an income loss which will be bad for both of us and our 2 year old son, my wife is a stay at home mom."

"I wanted to apply for a loan modifcation and wanted to ask you for some help. What are the ramifications of the new Obama stimulus plan for housing and since I am under the water big time. Will they do something for us in this plan or I should just go with loan modification?"

"We are cutting down our expenses but can't do anything with my son's needs so I would really appreciate your help."

From Reuters. "Stopping the housing crash is central to fixing the economy, and halting foreclosures would be a big step towards that, according to Ken Rosen from Berkeley, who is notable as being one of the economists who was suitably gloomy last year in Davos. Foreclosures cost 50-60 percent of the value of the mortgage whereas you might be able to keep someone in their house for 30 percent, he said. A house with a modified loan isn’t sold on, which further depresses house prices and errodes bank capital."

"'What we need is a moratorium on foreclosure while we get a plan in place. We could have five to eight million more foreclosures in the U.S. if we don’t do something about this. Banks have already written down these mortgages,' he said."

"Big problem however is securities and contract law. Since so many of these mortgages are in complex mortgage securities it can be cumbersome or impossible to get everyone to agree to mods. The Fed is already moving to do just that on loans it has on its books from Bear Stearns and AIG and is encouraging other owners to do the same."

The Las Vegas Sun. "The 4 percent loans are among several housing-related provisions Sen. John Ensign and Republican leaders in the U.S. Senate are developing as alternatives to President Barack Obama’s nearly $900 billion economic recovery plan now before them. 'How many of you would like a 4 percent mortgage?' Ensign asked this week in floating the plan. 'You have to fix housing; otherwise I don’t think the economy is going to recover from this.'"

"Washington’s main response to the mortgage crisis so far has been last year’s landmark housing bill, which created the Hope for Homeowners program. The program was expected to help 400,000 homeowners work with their banks to write down loans to more affordable levels. The program has fallen short. A report to Congress last month said only 300 loans were being reworked."

"Bert Ely, a banking consultant watching the debate, said ideas for a government-run program to offer low, fixed-rate mortgages surfaced late last year. But interest in it waned once the costs were considered. Republicans were not able to provide a cost estimate Thursday.'

"'When you start getting into the numbers, you start to realize it would be very difficult to execute and could be quite expensive,' Ely said. 'You’re talking about millions and millions of mortgages.'"

The Wisconsin Biz Times. "'The American people expect action,' Obama said between meetings with House and Senate Republicans on Tuesday. 'I don't expect 100-percent agreement from my Republican colleagues, but I do hope that we can all put politics aside and do the American people's business right now.'"

"Obama met this morning with several top corporate leaders to discuss the economy. Obama was surrounded this morning by several chief executive officers who are supportive of his economic stimulus plan, including: Steve Appleton, CEO of Micron Technology Inc.; David Barger, CEO of JetBlue Airways Corp.; Greg Brown, co-CEO of Motorola Inc.; John Bryson, CEO of Edison International; David Cote, CEO of Honeywell International Inc.; Debra Lee, CEO of BET Holdings Inc.; Anne Mulcahy, CEO of Xerox Corp.; Sam Palmisano, CEO of International Business Machines Corp. (IBM); Antonio Perez, CEO of Eastman Kodak Co.; Eric Schmidt, CEO of Google Inc.; Michael Splinter, CEO of Applied Materials Inc.; Wendell Weeks, CEO of Corning Inc.; and Ron Williams, CEO of Aetna Inc."

Your West Valley. "A leading economist told hundreds of West Valley leaders Wednesday that Arizona remains a few years away from digging out of the recession and the reason isn't solely about money, unemployment and a housing market gone bust. 'The problem isn't just financial now, it's psychological,' Elliott D. Pollack told those at Glendale Civic Center. 'Even those who own homes, have steady jobs, have savings, are taking a step back and deciding not to spend any money.'"

"Much of Pollack's presentation centered on how the economy in Arizona deteriorated in the first place. The culprit, Pollack said, was the real estate industry. 'From 2001 to 2006, the Valley overbuilt. They did 10 years' worth of building in six years, moved four years' worth of employment into those six years, which is why job growth continued to look so good for that time. But now we have tens of thousands of excess homes that we need to absorb,' he said."

"Pollack said the problem is the same across the nation. While an average of 1.2 million homes usually sit empty, now there are approximately 2.2 million. 'If the Obama administration really wanted to help, they'd go out and buy a million homes and burn them to the ground,' Pollack joked."

From The Times. "Alicia Smith has been bouncing from state to state trying to find a decent place to live. Evicted from her apartment, she found her way back to Markham with her two sons, age 8 and 10. Smith knew she needed a place for her boys to lay their heads down at night and feel protected."

"'I didn't have any confidence then,' said Smith, 33. ' just kept thinking ... what am I going to do ... where am I going to go?'"

"On June 30, Smith and her family found a local PADS - Public Action to Deliver Shelter - facility. Smith is reflective of the growing number of homeless. Illinois officials suspect the numbers are expected to grow as long as the economy worsens. Smith reflects a newer trend -- families seeking shelter."

"According to a recent report by Housing Action Illinois, 71 percent of state-funded shelters saw an increase in the number of homeless. 'There are many people who are experiencing a loss of jobs and those same individuals are having a hard time finding affordable housing,' said Bob Palmer, policy director for Housing Action Illinois. 'I know of some service providers who are turning people away.'"

From CNN Money. "Housing might be in worse shape than we think. There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market. The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market."

"RealtyTrac looked at listings in four states, California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database. The scope of the problem isn't clear, but it could be huge considering that RealtyTrac has a total of 1.5 million bank-owned properties on its site."

"L.J. Jennings, a real estate broker in Oakland, Calif., sees plenty of evidence. 'There are a number of properties in my area that have actually been taken back by the banks, but have not hit the market yet,' he said. 'Once a bank repossesses a property, in some cases, it can take more than six months to hit the market.'"

"He cites a handful of examples offhand, including a single-family home in Richmond seized in early October, a condo in San Ramon taken back the same month and a four-family building in Oakland that was repossessed in July. 'Either lenders are overwhelmed and can't get these properties back on sale quickly' said RealtyTrac spokesman Rick Sharga, 'or they're deliberately slowing down.'"