Housing News Belies Reality

Aug 22, 09 Housing News Belies Reality
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News reports are awash with the “good news” about home sales.  While I do not want to be overly pessimistic, I am genuinely confused about the rush to declare the recession over.  I want the recession to end.  However, what has been done to address the institutional failures that created the current crisis?  Congress passed, and Mr. Obama signed, some laws that were supposed to curb the most egregious practices of the financial institutions.  Yet, true reforms, such as erasing tax shelters, making the Fed more accountable, regulating financial instruments, and limiting executive compensation, have received little traction.

While home sales have risen, many homeowners are being threatened by underwater mortgages and many more are facing foreclosure.  I believe that many of the foreclosed homes that have been bought are currently being sold and contributing to the bump in home sales.  While this is welcome news for those able to afford a new home, it does little for the 13% (and growing) of homeowners that are behind on their mortgages.  According to the Mortgage Bankers Association, most of the sub-prime borrowers have been driven from the market.  Many of the people falling behind now are homeowners with traditional fixed-rate mortgages.

I want the economy to get better.  I want people to stop losing their jobs and people seeking work to find it.  However, I refuse to let them drown me in a sea of numbers.  We must remain vigilant and continue to demand accountability.  The recession will end; but we must take this opportunity to make sure we are never taken advantage of again.

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