If Mr. Trump gets precisely the policies he says he wants, then the economy will suffer a recession.

Indeed, the FHA was born out of the Great Depression, which was also caused in significant part by a foreclosure crisis. Mortgages in the early 1930s were mostly three- to five-year 'bullet' loans, which did not amortize and were due in full at maturity.

Yes. I don't think it would be appropriate at this point to raise taxes on anyone, certainly not in 2011.

An overheating economy, characterized by accelerating inflation and rising interest rates, is another precondition for recession. This doesn't describe today's economy.

Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.

A housing renaissance has begun. This may be hard to believe after the dizzying, six-year-long crash in home sales, construction and house prices. But housing turned the corner last year, and it will take off in 2013.

Investor demand for distressed property has been healthy, as rents rise to levels that can cover investors' costs while they wait for properties to appreciate. Giving investors a small tax break should further juice up demand, supporting prices for distressed homes and the market in general.