Greater Lakes Loans

Posted onNovember 23, 2011 - 10:23 pm by Admin | 0 Comments

The housing market has shown some signs of stabilizing, and even improving in some areas. Unfortunately, record levels of unemployment coupled with the loss of equity in homes that had little to no equity to begin with, continues to feed the foreclosure machine. Despite some signs of stability in the housing market, foreclosures remain a major obstacle to a meaningful recovery. And more borrowers in good standing are likely to miss their mortgage payments as the recession claims more jobs.

Sub Prime Loans Did Not Cause the Mortgage Crisis

In an online article from the Wall Street Journal titled, New Evidence on the Foreclosure Crisis: Zero money down, not subprime loans, led to the mortgage meltdown, dated July 6, 2009, writer Stan Liebowitz attempts to expose the continued increase in mortgage foreclosures. His answer, “The evidence from a huge national database containing millions of individual loans strongly suggests that the single most important factor is whether the homeowner has negative equity in a house- that is, the balance of the mortgage is greater than the value of the house.”

His article presents an interesting view of this present crisis. Citing "no money down" loans, not "sub-prime" loans, as the primary cause of the problem, Liebowitz asserts that policy aimed at addressing the sub-prime problem won't fix the bigger issue.


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