The Great Depression had collapsed the construction industry in 2005, and impacted the sales of homes from 1.5 million to 300 thousand in the year 2009. The efforts of government in bringing the lenders and borrowers to a common table have become difficult. The actions taken by the administration to lower the interest rates on mortgages is not having any positive impact. The bailout plan for the financial institution has not motivated banks to lend more to people. The latest strategy to refinance to home owners and institutions to modify the principal balances has been great incentive to the construction industry. The administration is relooking at housing finances in hard hit areas and analyzing the role of government in the future. According to Geithner, the failure in the construction industry has been due to the policy that had been adopted by the earlier governments. To know more log on to www.jobenomics.com
The policies of administration had intervened the housing market and induced growth and subsequent collapse. The administration had insulated the homeowners and lenders to speculate and insulate it. The administration has intervened and now controls the lending mechanism and also actively involved in reviving the housing market by taking appropriate actions. Fannie Mae and Freddie Mac were created to create affordable housing and mortgages to develop communities and help families to invest in homes. Federal Housing Finance Agency works as a super agency including Fannie Mae, Freddie Mac to create packaged home loans that can be sold as securities to different investors. The FHFA funding is partially done through tax payer’s money and through government created derivatives from the capital market. The FHFA is working on removing the toxicity from mortgage backed securities and is trying to instill confidence in people. They are also working on the mortgage rates to prevent a negative net worth position of the housing market.
There are different reasons for the present housing market situation due to foreclosures, underwater mortgages and delinquent mortgages and the administration is presently working hard to fix it. You can understand this in detail at www.jobenomics.com.There has been very little success and this has been very critical for the recovery of the housing market. The administration has been earnest in the efforts that bring hope for affordable homeowner program to end the recede. The government initiatives have delayed the foreclosure process but have not stopped the serious delinquencies. The federal housing administration was created to provide insurance for the low income families to reduce the risk. The FHA has increased its fold and has included the higher income group to make it wider. FHA has increased the borrower up-front cash to minimize the loan component. There are several challenges like few qualified borrowers and stringent lending requisites have been making it more difficult for policy makers to improve the real estate crisis. The underwater mortgages and delinquencies have created a shadow wave that has led to increased foreclosure. To mitigate the foreclosure crisis it can be handled by transferring the mortgaged backed securities to the secondary market that will stabilize the market and will eventually increase the housing market.