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As Foreclosures Surge ...
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The NYT editorial says the negative feedback loop of foreclosures begetting falling house prices, which beget more foreclosures, and further weaken banks, is well under way. One way to have broken this, was to enable good types of loan modifications, which reduce the principal for homeowners and reduce payments significantly. Sheila Bair at FDIC says 32% of prior payments is about the right amount. The bad types of loan modifications that lead to no reduction in principal, and put homeowners back in redefault because of large payments that homeowners "under water" or a lost job cannot afford, have so far been the dominant kind of loan modification. At present 14 million homeowners are "under water," in that their homes are worth less than what is owed on the mortgage. One of the crucial measures which would have enabled this, has not been pushed by the Obama administration through Congress. This was to pass an amendment that allowed bankruptcy judges to modify troubled mortgages. Banks which have taken billions of dollars in loans from the federal government were allowed to lobby aggressively to kill this amendment, and the Obama administration did little to push this amendment in Congress. 12 Senate Democrats joined 39 Senate Republicans to block a vote on the amendment. Says the NYT editorial "when the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators-the White House did'nt. When the measure failed there wasn't even a statement of regret." This could turn out to be a major mistake, because as the NYT points out voluntary loan modifications have shown poor results. The administration's plan to provide incentives for loan modification is untried and tested, and may not produce significant results. With 14 million homeowners under water, and spiralling foreclosures, the situation may get out of control and seriously damage the economy. After the moratorium in home foreclosures ended there is expected to be a big surge in foreclosures, with estimates of 290,000 to 341,000 foreclosures in March, 2009. If this is allowed to continue it will undo all the good work in other areas, the stimulus spending, rebuilding the auto industry and other steps. It will also be more difficult to reverse as valuable time passes and the cost of the crisis escalates. A consensus among many experts was that stronger action in connection with the banks was required, and Martin Feldstein has warned about the danger posed by foreclosures since early 2008, see links.
The beginnings of the foreclosure crisis and president Obama's failure to push for effective loan modification in Congress in 2009
05/04/2009
A legacy of the Obama administration begins in 2009 with no efforts in the U.S. Congress to push loan modification to prevent foreclosures.
Grouped Articles
New York Times 05/04/2009
New York Times 06/02/2009
Inside Trump Treasury nominee's past life as 'foreclosure king' of California
The Guardian 12/02/2016
The White House’s claim that 800,000 manufacturing jobs were added during Obama’s presidency
Washington Post 12/09/2016
Opinion | The Cost of Barack Obama’s Speech
The New York Times 05/01/2017
U.S. unemployment and foreclosures- 2011-2012
05/04/2009
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A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
New York Times 06/02/2009
Rising U.S. Foreclosures take on crisis proportions deepening the economic downturn.
08/24/2007
Foreclosures in 2008 hit 16% up from 6% in 2007, and in an accelerating trend if unemployment hits new highs.
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A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
Fannieâs and Freddieâs Foreclosure Oversight Questioned
New York Times 10/19/2010
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
Martin Feldstein and other experts renew their call to stem the decline in house prices with a new policy for homeowners under water - 2010-2012
01/05/2009
The cost would be an estimated $350 billion to cancel some of the mortgage debt of homeowners. Feldstein says this is a necessary step to revive the U.S economy. Letting the forest fire of foreclosures burn itself out would damage the U.S. economy further. Feldstein says this is not an option.
Grouped Articles
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
How to Stop the Drop in Home Values
New York Times 10/12/2011
Wealth gap in the U.S. between whites and minorities- devastating impact of the recession of 2008
01/05/2009
Hispanics and blacks counted housing equity as a much bigger part of their assets than whites. The recession and financial crisis of 2008 wiped out fully two thirds of the median net worth of Hispanic families and one half for Black families, with both groups having close to $6000 in total median net worth in 2010, according to data from Pew surveys.The recession has proved to be severe in its impact on minorities, and the election of a black president has done little to improve things- especially considering the dismal record of the Obama administration in helping prevent foreclosures.
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Racial Wealth Gap Widened During Recession
New York Times 04/28/2013
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New York Times 09/25/2010
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New York Times 05/16/2014
Economic Recovery Yields Few Benefits for the Voters Democrats Rely On
New York Times 05/19/2014
Geithner Book Reveals Consensus, Not VIsion, During Financial Crisis
New York Times 05/21/2014
Foreclosures in the U.S., the homeless and poverty.
01/05/2009
About 10% nationwide and 15% in the midwest of people who are at homeless shelters are there because of foreclosures according to social service agencies.
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A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 10/11/2013
Wall Street Journal 12/31/2013
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New York Times 01/23/2014
New Data Muddle Debate on Economic Mobility
Wall Street Journal 01/24/2014
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
Foreclosures and unemployment in the U.S.
05/04/2009
The Obama administration foreclosure relief programs were designed for subprime lending situations and not for the high unemployment. As a result few unemployed homeowners have benefitted.
Grouped Articles
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
New York Times 06/02/2009
Failure to stem foreclosures under the Obama administration continues inaction under Bush administration.
08/24/2007
The failure of the Obama administration to break the cycle of foreclosures begetting falling house prices begetting more foreclosures, further weakening the banks and the economy, with strong action. It continues the missteps of the Bush period and may undo much of the good work in other areas such as stimulus, restructuring the auto industry and new priorities. Inaction here is coupled with inaction in relation to insolvent banks and is likely to prove costly.
Grouped Articles
New York Times 07/17/2011
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
Fannieâs and Freddieâs Foreclosure Oversight Questioned
New York Times 10/19/2010
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
U.S. home foreclosures 2008-2009
01/15/2009
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A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
New York Times 05/19/2014
New York Times 05/04/2009
New York Times 06/02/2009
Foreclosure Filings Up 81% in 2008
Wall Street Journal 01/15/2009
Senior citizens and foreclosures in 2008-2009- the impact of the U.S. mortgage financial crisis
04/14/2009
Grouped Articles
Older Borrowers, Out in the Cold
Wall Street Journal 04/14/2009
New York Times 05/04/2009
Inside Trump Treasury nominee's past life as 'foreclosure king' of California
The Guardian 12/02/2016
Martin Feldstein's Op-ed in the WSJ, April 4, 2009, suggesting an alternative solution to the U.S. housing mortgage crisis during the 2008 global financial crisis
04/04/2009
The alternative solution would have been fairer to homeowners and reduced the wave of foreclosures that hit the U.S. in 2009-2013. The result was a double blow to the economy from foreclosures and higher unemployment, increasing inequality, and reversing decades of gains in strengthening the social fabric of America. Feldstein was Chairman of the Council of Economic Advisors under President Reagan and is a professor at Harvard.
Grouped Articles
Geithner's Bank Plan Is a Good Start
Wall Street Journal 04/04/2009
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
New York Times 06/02/2009
Janet Yellen Warns of Inequality Threat
New York Times 10/17/2014
Krugman on the Obama Administration, banks, settlements and the U.S. foreclosure crisis in 2011
01/02/2009
Failure of the Obama administration to reduce foreclosures and help homeowners. A worsening foreclosure situation leads to a continuing decline in housing prices and hampers an economic recovery in the U.S. This is something Martin Feldstein grasped very early during the 2008 financial crisis and made proposals for helping homeowners under water.
Grouped Articles
Washington Post 09/06/2011
Book portrays dysfunction in Obama White House - The Washington Post
Washington Post 09/17/2011
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Plunge in Home Sales Stokes Economy Fears
Wall Street Journal 08/25/2010
Wall Street Journal 12/31/2013
Charlie Rose Talks to Robert Reich
BusinessWeek 10/21/2010
Faces in the US housing and foreclosure crisis- 2010-2012
01/12/2009
Foreclosures have affected the lives of people in all segments of US society.
Grouped Articles
A Toxic Subprime Mortgage Bond's Legacy Lives On
Wall Street Journal 09/13/2013
Wall Street Journal 12/31/2013
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
Faces of the Home-Foreclosure Crisis
Wall Street Journal 12/29/2010
Foreclosures in Detroit, Michigan- 2009-2014
04/13/2009
Grouped Articles
Foreclosures hit suburbs as layoffs surge, mortgages reset
Detroit News 04/13/2009
$200 Million Could Curb Pension Cuts in Detroit
New York Times 05/22/2014
Detroit Task Force Says Blight Cleanup Will Cost $850 Million
New York Times 05/27/2014
New York Times 05/04/2009
Inside Trump Treasury nominee's past life as 'foreclosure king' of California
The Guardian 12/02/2016
Questions of fairness- could the U.S. have done more to help homeowners facing foreclosure? (1)
04/04/2009
Considering that Fannie and Freddie had paid back $185 billion of the $186 billion in aid from the U.S. government by 2013 and taxpayers were fully protected, could the U.S. U.S. government have done more to help homeowners as proposed by Sheila Bair, then head of the FDIC, economist Martin Feldstein, and others. What is the right balance between homeowner protection and protecting taxpayers in a properly functioning democracy? Is a Consumer Protection Agency which protects future homeowners a sufficient response, with little to show for millions who faced or went through foreclosure. How does this affect economic recovery as some sections of the population face a longer time to recover and income disparities worsened? What does this say for risks from future crisies and market behaviours?
Grouped Articles
Wall Street Journal 12/31/2013
Fannieâs and Freddieâs Foreclosure Oversight Questioned
New York Times 10/19/2010
Geithner's Bank Plan Is a Good Start
Wall Street Journal 04/04/2009
The Case Against the Bernanke-Obama Financial Rescue
New York Times 05/16/2014
New York Times 05/19/2014
New York Times 05/04/2009
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