I am a grumpy bystander who can’t take my desired "next steps" because no one will buy my house. Nevertheless, I think this guy is right:

The vast majority of homeowners will remain well ahead, even after the market corrects for housing inflation …

Not long ago there was broad agreement that … the principal impediment to homeownership was … the prevalence of high housing prices. Hence deflation of housing prices would be desirable.

He’s also right about this:

The 96 percent of mortgage borrowers who are fulfilling their commitments, often by scrimping, may be grumpy bystanders if many of the other 4 percent — those who found the phrase "variable rate" impenetrably mysterious — are eligible for ameliorations of their obligations.

Which is not to say that the lending agencies don’t also deserve to get spanked for their shady practices.