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Housing Crisis To Continue; 2.5 Million More Foreclosures Expected

Published 07/09/08 Jeff Bennett - Print Article
E-mail - editor@economyincisis.org

In an attempt to fix the housing crisis and create new credit rules, the Federal Reserve will begin new lending procedures to prevent lenders from taking advantage of individuals with weak credit.

The startling figures, announced by Treasury Secretary Henry M. Paulson Jr., revealed the housing crisis may last longer than expected; 1.5 million home foreclosures took place in 2007 and 2.5 million more are expected this year, according to The New York Times.

The greed and negligence committed by particular mortgage companies and lenders has left too many Americans homeless and tarnished their credit. New laws need to be enacted to keep these criminal activities in check and ensure homebuyers are never again fooled into a lucrative mortgage they cannot repay.

Source The New York Times:

With no end in sight to the turbulence in the housing and financial markets, the chairman of the Federal Reserve said on Tuesday morning that it would issue new lending rules next week to restrict exotic mortgages and high-cost loans for people with weak credit.

…

Treasury Secretary Henry M. Paulson Jr. said in a speech last week in London that the problems of the housing and financial markets might last longer than originally expected..

He followed up in another speech on Tuesday by saying that the Bush administration was working to prevent as many home foreclosures as possible, but that “many of today’s unusually high number of foreclosures are not preventable.” Mr. Paulson said 1.5 million home foreclosures were started in 2007 and that an estimated 2.5 million more would take place this year.

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