Bernanke Calls for Action in Foreclosure Crisis

The decline in home prices has led to a widespread wave of foreclosures. Ben Bernanke, chairman of the Federal Reserve, explained on Monday that this action must be relieved by means of a concerted effort by the government and private-sector. In the first three months of 2008, foreclosure filings of every kind had increased 112%, and Bernanke is pushing to avoid those foreclosures that can be prevented, citing a direct correlation between a decline in housing prices and an increase in delinquency rates. He proposed “piggy-back loans,” or loans that require low down payments or no down payment at all, to aid foreclosures.

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Housing Market Hits Even the Strong Cities

A number of cities that have held up as good housing markets in the midst of a national crisis have recently succumbed to the general trend. Lately Charlotte, NC, Seattle, Portland, Ore., and Salt Lake City have all registered declines even though they had posted pricing gains during 2007. What this development brings to light is that the trend of the declining housing market is extending its reach. However, these cities still remain better off than most cities and will most likely rebound more quickly than the others, as well.

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Bush Threatens to Veto Housing Legislation

Debate ensued this past Wednesday between Democrats and Republicans regarding a plan designed to help homeowners in danger of foreclosures. The Democrats had hoped to coming to a bipartisan consensus on the legislation, since that would lead to more readily available federal-insured mortgages to aid borrowers in refinancing their loans. Unfortunately, the White House remarked on Tuesday night that it opposed the bill, and President Bush proceeded to speak out strongly against it. A general disagreement ensued during Wednesday’s meeting.

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http://www.nytimes.com/2008/05/08/business/08housing.html?th&emc=th