"The foreclosure crisis is two years old. We haven't found the bottom yet. You know, we're out there struggling. Prices are still going down. But we're caught in a downward cycle," said Warren Chair with the Congressional Oversight Panel.
The panel is encouraged by President Obama's plan to deal with the foreclosure crisis, but said it may not do enough for people who owe more on their mortgage than their home is worth.
"That's a foreclosure waiting to happen. And this plan says we're not going to deal with that. That also means certain areas of the country, the ones who have been the hardest hit, are not going to be able to take advantage of the plan," said Chair.
The report comes amid more grim housing news across the country. More than 11 percent of homeowners with a mortgage are in foreclosure or at least a month behind in payments...giving new urgency for lawmakers to help.
Thursday night the House of Representatives passed a bill allowing bankruptcy judges to help homeowners by forcing lenders to "cramdown" or reduce home values and lower interest rates. That bill must now be considered by the senate.
Friday's report points out a difficult chicken-and-egg problem. Stabilizing the housing market will not solve the economic crisis, it says, but the economic crisis cannot be solved without first stabilizing the housing market.
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