Shiller wants pre-planned workouts on future mortgages
Economist Robert Shiller called the Home Affordable Modification Program a failure and said lawmakers and regulators should provide an incentive to create private mortgages with a pre-planned workout. "We have to make some enabling legislation, some clarifying regulatory standards, but there ought to be a private mortgage that has a workout that's already prepared and not something that's iffy or a one-time workout. It would be continuous, automatic, systematic and it wouldn't reward the complainers, and it wouldn't be a bailout. It would be there for everyone," Shiller said in an interview with The Wall Street Journal. As for the current financial system, Shiller fears home prices could continue to slide for some time but there isn't a clear trend. Speaking at Standard & Poor's housing summit in New York last week, Shiller was more cavalier, saying there is room home prices could drop another 10% to 25%. The S&P/Case-Shiller index he helped build reached a new low after post-crisis in the first quarter. "There's a gut feeling that this ought to be the bottom. Maybe it is the bottom. Maybe when the summer season picks up, we'll see price rises and the market will be encouraged again. But I still worry about the general downtrend," Shiller told the Journal. "It just doesn't look good right now." Write to Jon Prior. Follow him on Twitter @JonAPrior.