08/03/2009 05:12 am ET Updated May 25, 2011

Foreclosure Crisis Caused By Zero Money Down, Not Subprime Loans: Study

What is really behind the mushrooming rate of mortgage foreclosures since 2007? The evidence from a huge national database containing millions of individual loans strongly suggests that the single most important factor is whether the homeowner has negative equity in a house -- that is, the balance of the mortgage is greater than the value of the house. This means that most government policies being discussed to remedy woes in the housing market are misdirected.

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