Obama administration sings new tune on foreclosures

By Tami Luhby, senior writerNovember 2, 2010: 9:21 AM ET

NEW YORK (CNNMoney) -- The Obama administration is singing a different tune about foreclosures.

A year ago, officials focused on stemming the foreclosure tide. Now they are touting the need for foreclosures to rebuild the housing market.

Last week Phyllis Caldwell, head of the Treasury Department's Homeownership Preservation Office, told a congressional panel that "an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them."

And White House Press Secretary Robert Gibbs last month told reporters that without sales of homes in distressed areas the "recovery in the housing market stops. It's frozen."

"That obviously can have -- we believe and others believe -- a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit," Gibbs said.

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