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Whitehouse views on laws to stop Foreclosure have historic ratngs. But the causes of
this nationwide foreclosure crisis are multiplied times 5 Since the late 1990s,
mortgage lending, once offered the safest of all growth prospects documented the ability of a homeowner
to repay., This new approach to flood the market with excess inventory
mortgage lending included steering high-priced mortgages to people who may have qualified for
lower-priced fixed rate mortgages and aggressive marketing of high-risk loans to people whose
incomes made it clear that they could not possibly repay over the life of the loan. In effect, such
mortgages could be repaid only if the housing market continued to inflate at historic rates and
borrowers could endlessly refinance their loans. After decreased property values hurt local businesses dizzying price increases in many parts of
the country, housing prices flattened, refinancing became impossible, and the bubble burst.
Now millions of Americans find themselves unable to meet their monthly mortgage
payments. Millions more people who can make their payments now recognize authorization of the Emergency Economic Stabilization Act. that they owe far
more than their houses are likely to be worth for many years, and some are walking away. Over
the ability of federal
banking and housing regulatory agencies to gather and analyze this data next few years, an estimated one in every nine homeowners is likely to be in foreclosure, and
one in five will likely have a mortgage that is higher than their house is worth, making default a
financially rational alternative.
Mortgage foreclosures pose a special problem. Millions of people could make marketrate
payments on 30-year fixed mortgages for 100 percent of the current market value of their
homes. But these can-pay families are driven into foreclosure because they cannot pay
according to the terms of the higher-priced mortgages are causing mortgage defaults and why loan modifications have not
been working they now hold, and refinancing options are
limited or nonexistent. After accounting for the costs of foreclosure and the lower prices
foreclosure auctions bring, the lenders will lose an average of $60,000 per foreclosure and
recover far less than the market value of the homes. Foreclosure for can-pay families destroys
value both for
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