Foreclosure Preventions Need Fresh Thinking
March 25, 2008
The Federal Reserve Board Chairman, Ben Bernanke, recently said that the mortgage and financial industries would need to begin using some creative thinking in order to decrease the number of preventable foreclosures. The Fed itself has been using some rather unique thought processes as it has tried to avoid a potentially devastating crash in the housing markets. Now, lenders are being asked to step up to the plate.
In a recent speech to bankers in Orlando, Florida, Mr. Bernanke urged the banking industry to begin thinking of new approaches to handling the many problems that both lenders and borrowers are facing.
In that speech, Bernanke said: “Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping but more can, and should, be done.”
He went on to say: “Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy.”
The Fed Chairman made it clear that rhetoric alone would not save the housing market. Clear and decisive action is needed in order for real relief to come about.
Experts have already suggested that the housing prices will only continue to fall and that the worst of it may not have occurred yet. In fact, some suggest that only half of the decline has actually taken place so far.
Bernanke reported that home delinquencies and foreclosures will continue to increase for some time. This, of course, will only add to the already heavy inventory of unsold homes on the market. The number of unsold, vacant homes was reported to be around two million units at the end of 2007.