The ongoing housing implosion poses “a significant risk” to the economy, Treasury Secretary Henry Paulson said in a speech at Georgetown University today, in a sobering about-face from earlier attempts to downplay the crisis. “The ongoing housing correction is not ending as quickly as it appeared,” he said. “It will continue to adversely impact our economy, our capital markets, and many homeowners for some time.”
Paulson recommended changes in the way mortgages are regulated by states and the federal government, saying the "patchwork structure should be streamlined and modernized." He called for "a uniform national licensing and monitoring system for mortgage brokers." He backed away from federal efforts to shore up credit markets to cushion investors, but added: "Still, we must recognize the very real harm to families affected by the housing downturn."