Mortgage Update, RC's view

Just askin' a simple question of Fed Reserve Governor Elizabeth Duke.

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"It would be hard to overestimate the damage that has been done to the housing market in recent years, and especially to the millions of families that are suffering the devastating consequences of foreclosure," Duke said. "It would be equally difficult to overestimate the damage that would be done in the future if we must live with a chronically impaired mortgage market."

This is a quote from a speech recently delivered by Fed Governor Elizabeth Duke.  I'll bet that everyone reading that quote agrees with her - I do.  Her speech focused on the mortgage markets and how to "fix" them with all kinds of help from the Federal Government, HUD, the Federal Reserve, etc.  Her ideas ranged from better homebuyer education to greater transparency and simplicity for the borrower in the loan application process.  Community action groups can also play a positive role in "fixing" the problems caused by foreclosures, she said.

Elizabeth Duke is a FRB Governor, so it's no surprise that her focus is on how the Federal Reserve and other tools of government (I don't mean "tools" as a perjorative here J) can "fix it".  Shoot, I'd be in the same mindset if I were in a position like that.

What I think gets missed over and over and over, ad nauseum, is that the reason we've got this mess is primarily because we've got us a bad economy; millions out of work; deep recession; thousands of jobs lost (approx. 500,000 in the mortgage industry alone).  I've never seen the survey - and don't know if it even exists - that asks those who have lost homes to foreclosure "why?".  My guess is that darn few would answer that they lost their home because they didn't understand the terms of their loan.  In fact, I'd guess that at least 90% would say they lost their job and haven't been able to find another.

What do you think our foreclosure rate would be if all those folks hadn't lost their jobs . . . and would the mortgage industry be the big bad wolf it is today if they hadn't?

Just askin' - rc