Housing Crisis

630 Words Jul 31st, 2013 3 Pages
Reflection Paper
Housing Crisis

Frontline producer Michael Kirk tries to explain how the economy went so bad so fast. Why emergency measures by Federal Reserve Chairman Ben Bernake and Secretary of Treasury Henry Paulson couldn't manage to prevent the worst economic crisis in a generation. It was 2007 when the housing bubble began to burst and Wall Street started to panic. By spring of the following year, rumors began to swirl that prominent investment bank Bear Stearns was about to go bankrupt due to billions of dollars in bad mortgages. In the world of finance rumors can be the difference between success and failure. It was the beginning of a bad chain reaction, someone quoted in the clip “it was like a disease spreading quickly”
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Like many others have said if you reward or do not punish bad decisions than they will be made again in the future. By not allowing the risk takers to fail we have welcomed the opportunity for them to put us in a bad situation again.
What is the housing economy today? According to the National Association of Realtors, pending home sales improved slightly in April and continues to be well above a year ago. There are reports of bidding wars on some properties in neighborhoods where few homes are on the market. Some are even working there through the inventory of homes that were foreclosed on during the housing crisis. But there are many whom this is not reality. CoreLogic reports that 4.4 million foreclosures have been completed since 2008, the start of the Great Recession. In April, some 52,000 foreclosures were completed, a drop of 16 percent from March. Still, that’s twice as many foreclosures as in a normal housing market.
According to an article in the Washington Post, for a housing recovery to be meaningful, more neighborhoods must be included in home price recoveries and even the worst neighborhoods must see some uptick. Credit must be extended to people who need it — not just to those who already have it.

Reference
Real Estate Matters: Is the housing crisis over? Maybe not for minorities.
By Ilyce R. Glink and Samuel J. Tamkin, Published: June 11