A lot of grim faces in Washington yesterday

Well, more than usual, anyway. I mean, DC can be a pretty grim place even on a good day.

But, in case you missed it, the U.S. Treasury Department hosted a forum yesterday in an ongoing effort to resolve the "crisis" in our country's housing market. All the big names were there. And, it seemed, the bigger the name meant the bigger the frown.

Angelo Mozilo, head of Countrywide Mortgages, was there. Of course, he was lobbying hard for the feds to jump in and save lenders by having Fannie Mae and Freddie Mac secure loans the private sector won't. And, he wants DC to mandate other lenders to follow his company's lead and freeze interest rates for those in danger of defaulting on their mortgages. Both of these suggestions rub my free market soul the wrong way. But, then again, I'm one of those heartless folks who got a traditional mortgage and pay it on time.

Bob Toll was there, too. He's the head of Toll Brothers, the country's largest luxury home builder. He warned any potential homebuyers out there, if indeed any are left, that this is "not the best time." He is correct. Not only does the liquidity problem make it hard to get a loan, but prices are going to keep falling. So, sit back and wait, you could get a better deal--if you can find someone to finance you!

The most alarming statements were made by Moody's chief economist Mark Zandi, who quoted several statistics that he said indicate we are in the worst housing downturn since the Great Depression. And, more frightening, he believes it will continue thru the end of the decade.

Zandi's dire prediction was supported by a Bank of America Securities report that expects median home prices will actually DROP 15% over the next four years.

None of this is good news to us socks in the homebuilding industry. But, it could be devastating news to a lot more people beyond the dryer. Hang on to your hats folks, it's going to be a wild ride!