In a forbearance, the homeowner pays interest and principal on a smaller mortgage, at least for a time, but still owes the full amount. The lower monthly payment helps with affordability, giving stressed homeowners a break.

The discussion in Washington has changed dramatically. I mean, it's no longer a question of should we address entitlements - it's no longer a question of do we need to reduce spending in the future.

Lenders look at potential borrowers from many angles before extending credit: How much of its income will a household need to put into debt repayment? How large is the down payment? Does the borrower have a job with a stable income? What is the borrower's credit score?

They called me the sexiest economist in America, and that was years ago, when I had hair and body mass and my teeth were shiny.

My policy is I will help any policymaker who asks, whether they be a Republican or a Democrat.

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

The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.