The Issue Of The Housing Crisis

The mortgage crisis of 2007 marked catastrophe for millions of homeowners who suffered from foreclosure and short sales. Most of the problems involving the foreclosing of families’ homes could boil down to risky borrowing and lending. Lenders were pushed to ensure families would be eligible for a loan, when in previous years the same families would have been deemed too high-risk to obtain any kind of loan. With the increase in high-risk families obtaining loans, there was a huge increase in home buyers and subsequently a rapid increase in home prices. As a result, prices peaked and then began falling just as fast as they rose. Soon after families began to default on their mortgages forcing them either into foreclosure or short sales. Who was to blame for the risky lending and borrowing that caused the mortgage meltdown? Many might blame the company Fannie Mae and Freddie Mac, but in reality the entire system of buying and selling and free market failed home owners and the housing economy.

During the early 2000 's, the United States housing market experienced growth at an unprecedented rate, leading to historical highs in home ownership. This surge in home buying was the result of multiple illusory financial circumstances which reduced the apparent risk of both lending and receiving loans. However, in 2007, when the upward trend in home values could no longer continue and began to reverse itself, homeowners found themselves owing more than the value of their properties, a trend which lent itself to increased defaults and foreclosures, further reducing the value of homes in a vicious, self-perpetuating cycle. The 2008 crash of the near-$7-billion housing industry dragged down the entire U.S. economy, and by extension, the global economy, with it, therefore having a large part in triggering the global recession of 2008-2012.

The housing crisis of the late 2000s rocked the economy and changed the landscape of the real estate business for years to come. Decades of people purchasing houses unfordable houses and properties with lenient loans policies led to a collective housing bubble. When the banking system faltered and the economy wilted, interest rates were raised, mortgages increased, and people lost their jobs amidst the chaos. This all culminated in tens of thousands of American losing their houses to foreclosures and short sales, as they could no longer afford the mortgage payments on their homes. The United States entered a recession and homeownership no longer appeared to be a feasible goal as many questioned whether the country could continue to support a middle-class. Former home owners became renters and in some cases homeless as the American Dream was delayed with no foreseeable return. While the future of the economy looked bleak, conditions gradually improved. American citizens regained their jobs, the United States government bailed out the banking industry, and regulations were put in place to deter such events as the mortgage crash from ever taking place again. The path to homeowner ship has been forever altered, as loans in general are now more difficult to acquire and can be accompanied by a substantial down payment.

Post-housing/financial crisis of 2007-2009, the housing market seems to be showing signs of improvement after great downturn. With the downturn in housing prices, many homeowners did not have enough equity to avoid taking a loss on the sale of their homes so they are sitting with home loans based off of higher-than-current mortgages. However, in November the National Association of Home Builders’ sentiment index jumped to 20, which is the highest reading in over a year. Demand for mortgages has also seemed to pick up a bit according to the Fed’s 4th quarter loan survey. Construction remains at historically low levels but has increased as of late, and the number of

The Federal Government needs to make sure to enforce strict guidelines on who can and cannot be accepted for a home loan, and not allow big investors to borrow excessive money at low interest rates to inflate the investor’s financial advantage. If the government starts allowing lower standards on mortgages, we are going to end up in the same catastrophe once again. In an article written by U.S. News and World Reports entitled Should the Federal Government Provide Support to the Mortgage Market?, the Federal government and the President attempted to get involved with the housing market. The passage implicated that Obama wanted to do away with federally funded conglomerates Fannie Mae and Freddie Mac and implement another type of government assisted program ("Should the Federal Government"). The program would prevent the mistakes made by Fannie and Freddie which created the original “housing bubble burst” ("Should the Federal Government"). One of the Senate bills suggests the government create “a new agency, the Federal Mortgage Insurance Corporation to replace Fannie and Freddie” ("Should the Federal

Affordable housing in the United States describes sheltering units with well-adjusted housing costs for those living on an average, median income. The phrase usually implies to applied rental or purchaser housing within the financial means of lower-income ranges specific to the demographics of any given area. However, affordable housing does not include those living in social housing owned by government and non-profit organizations. More specifically, the targeted range for housing affordability sets below 30 percent of a household's annual income, including all applicable taxes, utility costs and home owners insurance rates. If the mean income per household breaches the 30 percent mark, then the agreed status becomes labeled as

In 2007, the U.S. fell into a deep financial recession. One of the main causes of this was the bursting of the housing bubble, which lead to a housing crisis. What is a housing bubble? A housing bubble is defined as “a temporary condition caused by unjustified speculation in the housing market that leads to a rapid increase in real estate prices” (businessdictionary.com 2014). When the bubble bursts, the result is a quick decline in home prices (businessdictionary.com 2014).

The economic decline has possible home buyers, especially first time home buyers, scared to invest anything into the housing market. With the fear of another depression in the back of everyone's minds, some businesses are attempting to clarify the pros of home ownership.

The Big Short is a movie that discusses the housing market crash in 2008. As you may know, the banks, the mortgage brokers, and the consumers were all affected by this collapse. On each level of the system, there were things that went wrong and that could have been changed that could have prevented the failure of the housing market.

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”

Although Mortgage Backed Security (MBS) and Collateralized Debt Obligation (CDO) are very similar, they are not the same. MBS are a type of bond or securities that represent an investment in a pool of mortgage loans. For example, if I want to buy a house the first thing I will need to do is go to a bank to request a mortgage for the amount of money I need. Then, after the bank approves me the mortgage (plus interests), the bank will sell my mortgage to an investments bank which eventually will sell it to more investors. The MBS is a way to lend money to people without worrying about they have the money to pay or not.

The lack of affordable housing in the United States is a problem that doesn 't receive nearly the attention that it necessitates. This absence of affordable housing became especially prevalent following World War II when suburbanization spread across the country like wildfire. Although the sheer number of homes increased, Jim Crow segregation influenced housing policy, meaning that white institutions prevented blacks from obtaining the mortgages needed to afford such homes. Therefore, rather than accept subprime loans, which often result in foreclosure, many black people have been pigeonholed into paying exorbitant rates for dilapidated rental properties located in inner-cities, thereby creating the affordable housing problem. Although the situation seems bleak, with careful planning and execution, we can solve the affordable housing problem. Specifically, my proposal involves the following two components: the government must first revise and draft three forms of legislation that create strict yet concise standards that landlords must follow, and then allocate federal funding to health and wellness programs within poor communities. By examining the contributing societal factors to the lack of affordable housing in Milwaukee, Wisconsin, and then implementing the proposal mentioned above, one could potentially solve the affordable housing problem there and transpose the plan to other impoverished cities across the country.

0.66%”. Immigration within Canada has a narrow range of destinations, between 1991-96, 61% of the immigrants settled within Toronto or Vancouver. Immigration is the leading elements of growth within the city and accounting for 80% of the growth from 91-96, this upturn began in 86 after the world expo. With the majority of people immigrating towards Vancouver and Toronto, those markets are being overwhelmed with a greater demand. The Typical person moving here through immigration would be a mother and children, the mother would be a homemaker and the child would be a student.

Around 2006 the price of houses began to fall substantially fast. “The oversupply of houses and lack of buyers pushed the house prices down until they really plunged in the late 2006 and early 2007” (The Subprime Mortgage Crisis Explained). These actions threw investors into a big dilemma. In the beginning they believed buying the mortgages would bring them a profit, but quickly realized that the mortgages would cost them more financial damage than reselling the homes. “Nationwide, home vales have declined about 16% since the summer of 2006 and experts project that the drop will continue until homes have lost about 25% of their value” (Biroonak, 2008). In other words mortgage homes are “underwater”, that is, the mortgage owed equals or exceeds the value of the house (Biroonak, 2008). Investors and homeowners started to go more in debt trying to pay off their original debts.

The current real estate crisis that America finds itself in is one of the greatest challenges America has ever faced. America’s troubles are further compounded by increasing unemployment of American citizens and environmental problems like global warming. Solving any one of these problems would be a Herculean task, yet they must each be addressed in order to protect American families from disaster. However, it is possible to find a solution to the problems of the real estate crisis that can also be used to improve the problems of the unemployment and environmental destruction. The first part of the solution involves the United States government purchasing the homes that have been foreclosed and using them to offer temporary housing to