Tuesday, May 26, 2009

Foreclosures Rise With Unemployment, What State Policymakers Can Do

The New York Times reported in "Job Losses Push Safer Mortgages to Foreclosure" that
in the latest phase of the nation’s real estate disaster, the locus of trouble
has shifted from subprime loans — those extended to home buyers with troubled
credit — to the far more numerous prime loans issued to those with decent
financial histories. With many economists anticipating that the unemployment
rate will rise into the double digits from its current 8.9 percent, foreclosures
are expected to accelerate. That could exacerbate bank losses, adding pressure
to the financial system and the broader economy.
For policies to reduce foreclosures.

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