This is my call-out to the Romney campaign on how to fix the housing market, and thus the economy.
Neither candidate has mentioned how to get the housing market going, and since Obama has already tried and failed, this is my recommendation to Romney: Tell America how you are going to get the housing market going and you will win the election.
First, I don't believe the Government can unilaterally turn around the housing problem because housing is about supply and demand.
Supply and demand is different from city to city, so the old saying that "real estate is local" is still true for the most part.
Local migration trends, local job markets, and local economies mostly drive local housing markets.
However, there are things that the Federal government can do to set up an environment where supply flows more freely and demand is satisfied by making it easier for buyers to purchase.
While, the government cannot fix the housing machine, it can add some lubrication to it.
Here's my 10 point plan for Government Romney (please steal it and take all the credit).

1. Stop all Government Bailouts.
   Demand comes from job growth.
   Bailouts cost money and incur more government borrowing and more government debt, both of which hurt business hiring and thus real estate demand.
   
2. Expand Borrowing Programs for Investors.
   Investors did cause some of the bubble because of easy-qual loans, but investors can also bail out the bank owned inventory.
   The problem is that borrowing is too difficult.
   The government can ease restrictions for well qualified investors to borrow and buy investment properties.
   Bring back stated income loans for high FICO borrowers who put puts 25% or more down.
   Even with "liar" loans, a 25% down payment likely eliminate negative cash flow and thus borrower defaults on investor loans.
   
3. Expand the FHA Program.
   FHA 203k program allows buyers to borrow 97% of the purchase price + repairs, but ONLY if you buy the property as your primary residence.
   This loan program is designed to move HUD inventory and help increase home ownership for lower income people.
   But what about low income people who need to rent? The increasing demand for rentals has driven rents higher and vacancies lower.
   Because supply of low-income rental housing is short, many landlords are gouging low income tenants.
   Here's a way to solve two problems at once: expand the 203k program to investors who can buy HUD homes at discounted prices with low down payments in exchange for a requirement that they rent to low-income people at a more reasonable rate.
   Rent control should not be forced on landlords, it should be volunteered by landlords with profit incentives.
   
4. Capital Gains Rate Must Stay Low.
   President Obama has already said he would raise capital gains rates.
   This would discourage landlords who have owned properties for a long time from renovating and selling their properties.
   When properties are sold, contractors, brokers, title companies, and appraisers get paid.
   When landlords have a disincentive to sell, property sales will drop and everyone in the industry will suffer.
   Plus, investors who buy any commercial property will not be willing to risk their capital if they know their tax rate at the end will be higher.
   Romney has said he will keep the capital gains rate at 15% or lower.
   If the capital gains rate for real estate were cut to 10%, more people would buy real estate because the net profit is more commensurate to the risk.
   Also, there should be a lower short-term capital gains rate for people who flip real estate.
   
5. Keep the Mortgage Interest Deduction.
   Both sides have discussed reducing or limiting this deduction for people who make more money.
   This is a mistake.
   It is not worth owning an expensive home vs.
   renting one if there's no tax writeoff.
   This will hurt the high end of the real estate market.
   If Romney plans on lowering the income tax rates and eliminating deductions, this is one that must not be eliminated or it will backfire.
   
6. Eliminate Gains on Short Sales.
   Many underwater homeowners are avoiding short sales because of the negative tax consequence of the short.
   Currently, the tax rules punish a homeowner by taxing as income the amount of forgiveness of the debt.
   For example, if a homeowner owes $200,000 and the bank shorts it to $150,000, the homeowner now has "earned" $50,000 in taxable income.
   While some this has been waived temporarily for owner-occupants in some cases, it should be make permanent for all real estate owners, including investors.
   Much of the banks' shadow inventory can be cleared if investors and non-owner occupied homeowners would volunteer for a short sale and not get taxed on the forgiveness of debt.
   
7. Allow Homeowners to Take a Capital Loss.
   If investors can take a loss on a house, why not a homeowner? Many people who lost in the last round are afraid to buy a house again for fear of losing money.
   If they would write off their losses like an investor, it would make them feel more confident to buy again.
   
8. Change FNMA Rules for People with Short Sales or Foreclosures.
   Once a person has a short sale or foreclosure, then have to wait 4 or more years to buy another home because of the credit hit from the foreclosure or short.
   Allow these people to buy again within a year if they put 25% or more down and can prove "undue hardship" that caused the foreclosure or short sale (such as a loss of job, medical problems, or the zip code in which they lived dropped more than X% and they could not resell).
   
9. Rent Out Existing Inventory.
   Banks have endless supply of shadow inventory of houses in default because people are upside down.
   Banks have not been willing to lose all their equity by taking drastic short sales.
   These banks should be allowed to offer homeowners to take a deed in lieu and rent bank to the homeowner with an option to re-purchase.
   This will get the income coming back in and avoid the cost of a foreclosure and resale of the house If the property comes back in value, the homeowner can buy the house back at a pre-determined price.
   Everybody wins.
   
10. Loosen the Banking Rules.
    While loose rules led to some of the cause of the bubble, the pendulum has swung too far in the other direction.
    Regs like Dodd-Frank have made it almost impossible to banks to lend in a reasonable manner.
    Bernanke has tried to stimulate lending by buying mortgage with government money and it has not worked.
    Printing money is not the solution - lightening the regulatory burden on banks is what will stimulate them to lend more.