Today's roiling mortgage market and still-high prices have made buying an entry-level house in Southern California seem about as likely for struggling first-time buyers as owning a villa at Italy's Lake Como. At least, that's how Christopher and Hedy Maar saw it. Then lightning struck.

Recent turmoil in the financial market -- specifically the sub-prime mortgage mess -- has focused attention on the impact that a bursting U.S. housing bubble could have on the economy. Dean Baker, co-director of the Washington-based think tank Center for Economic and Policy Research, explained in an interview how the market chaos may affect homeowners and what possible solutions are available. Here is an edited transcript of his comments: