The Federal Reserve has thus rightly focused on getting the economy moving by taking unprecedented steps to ease the credit crisis.  Yet the Federal Reserve’s solution could spark an equally troubling problem.

The federal government came through with real incentives for home buyers when it passed the stimulus package in mid-February, followed a day later with more positive action when the Obama administration released a plan for helping home owners facing foreclosure . But will the administration now take away with one hand what it’s given with the other?

Declining confidence and underwriting volatility mean that more deals are never reaching the closing table.

The Federal Reserve in late December took the unprecedented step of lowering its short-term target interest rate essentially to zero. But more important, it made a firm commitment to provide additional support, as needed, to the housing market by continuing to purchase mortgage-backed securities.