Rethinking Housing Market Recovery

The Federal Reserve Board released a White Paper on January 4th that contain recommendations for housing market recovery, including: Government facilitated Real Estate Owned Property (REO) Rent to Own Programs, Land Banks, changes to the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP).

The report states:  “The ongoing problems in the U.S. housing market continue to impede the economic recovery. House prices have fallen an average of about 33 percent from their 2006 peak, resulting in about $7 trillion in household wealth losses and an associated ratcheting down of aggregate consumption… But the problems also reflect three key forces originating from within the housing market itself: a persistent excess supply of vacant homes on the market, many of which stem from foreclosures; a marked and potentially long-term downshift in the supply of mortgage credit; and the costs that an often unwieldy and inefficient foreclosure process imposes on homeowners, lenders, and communities… Policies could be considered that would help moderate the inflow of properties into the large inventory of unsold homes, remove some of the obstacles preventing creditworthy borrowers from accessing mortgage credit, and limit the number of homeowners who find themselves pushed into an inefficient and overburdened foreclosure pipeline.”

For the full white paper, visit: http://federalreserve.gov/publications/other-reports/files/housing-white-paper-20120104.pdf

Source
Federal Reserve
Teaser/Summary
Federal Reserve Board Releases White Paper with Key Recommendations

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