The administration is talking out of two sides of its mouth on the issue of foreclosures. On the one hand, it is incentivizing banks to modify loans by waving billions of dollars of subsidies at lenders while accusing the state courts are slowing down the process thus destabilizing housing prices. Sounds like a scenario that further substantiates the argument that the federal government stay out of the housing market.
I also don’t see how Mark Zandi’s suggested policy of federalizing foreclosure law could pass constitutional law muster. The property doesn’t cross state lines. Sure, mortgage payments may cross state lines but the payments are not the primary issue. It’s the property.