In a sense, yes, the statements in the article are correct. The government through entities like the FHA, Fannie, Freddie, and Ginnie are now the sole purchaser of mortgage securities in the secondary marketplace. For those that afford to drop 20% down on a home, then their bank may or may not carry the note depending on available capital at the bank for such loans and their appetite for the collateral.

Since the beginning of the mortgage crisis the government has taken nearly every step, imaginable and un-imaginable, to hold a float the housing market. The reason for this is simple. Mega banks and the GSE's themselves were so overweighted in the underlying securities that if home prices were to drop precipitously, the whole house of cards would come crashing down. Values of securities would have to be valued in reality, as opposed to the Alice in Wonderland values they hold now.

Tax credits, secondary market purchases, re-works, FHA, and the like won't stop the downfall. Bottom line is that exotic financing allowed home prices to outpace real income by a large margin. Now that the financing is gone the only thing that will restart the housing market is for prices to come back into line. The gov't can waste all the time and money they wish but there will be no stopping price decline. What's next $20k tax credits for home buyers? How bout $30k? Do I hear $40k? Anybody?

What may happen (since so many have short memories) is a return to exotic mortgage products sponsored by the gov't. Although that would really suprise me,........and then again it wouldn't.

More foreclosure records on the way this year with the maturity of a large number of Option ARM mortgages. Although those problems will be limited to certain markets they do end up affecting lending as a whole. Which in turn put more downward pressure on prices nationally.