How to Prevent the Next Residential Mortgage Crisis

The Wall Street Journal reports:

A successful model exists to our north. In Canada, the interest on mortgages is not tax deductible, which gives homeowners good reason to pay down their principal as quickly as possible. Canadian banks also hold about 75% of their loans on their books, which encourages more prudent lending. Thanks to such policies, just 1% of Canadian mortgages are currently in foreclosure or delinquent, compared to about 14% of American mortgages. The Canadian real estate market has already rebounded above pre-recession levels.

Getting government out of the mortgage business would mean significant upheaval in the ways homes are paid for in America, so if it's going to happen it must happen slowly and carefully. But by forcing banks and consumers to put more skin in the game, Congress could help head off the next housing crisis. The best thing we can do for America's homeowners now is to make sure they own as much of their homes as they can.

An article well worth your time.