I found the use of the phrase “trust deficit” in U.S. real estate amusing since it’s a euphemistic way of saying “no one wants to buy an asset that may decline in future value“. Hello? Double dip in real estate anyone?

You’ve [FHA Commissioner David Stevens] talked a lot at this confidence about the lack of confidence in the market whether it be for real estate investors or consumers buying a house, this lack of trust, or trust deficit, as you said, how would you restructure the servicing industry to gain confidence in this market. — Diana Olick, CNBC

Perhaps my thinking is too applied or simpleton-ish, but the mortgage servicers wrongly foreclosing on active military personnel during deployment, banks foreclosing on homes without a mortgage, or banks refusing to produce the promissory note to prove they have a right to foreclose, doesn’t do much to bridge a supposed “trust deficit”.

Moreover, few people, except perhaps savvy buy & hold real estate investors, want to buy an asset that could lose X% of it’s value over Y number of years.