President Tries to Help Homeowners Avoid Default

[Sep 19, 2007.]

President George W. Bush is taking action to try to prevent homeowners who took out subprime mortgages from going into default.

Some observers believe the action is long overdue, given the current housing crisis. Economists have said the housing situation threatens to throw the economy into a tailspin, resulting in recession.

Defaults have been on the rise, especially among those with subprime mortgages. Subprime mortgages are typically extended to individuals with shaky credit histories. It's predicted that consumers may scale back their spending in response to the housing crisis, a situation which could have a ripple effect throughout the entire economy.

The President wants homeowners to be able to change the terms of their loans so that they can avoid default. Some special products may also assist consumers in avoiding home loss.

Meanwhile, Democrats are blaming the Bush Administration for failing to enforce regulations that could help homeowners avoid default. As a result of the political dispute over the current housing mess, the issue could emerge as a topic of discussion in the race for President. The default rate threatens to climb in 2008, in the heat of the Presidential campaign.

Some observers have criticized the chairman of the Federal Reserve, Ben Bernanke, for failing to take steps to alleviate the credit crisis.
Meanwhile, attention is being focused on the Federal Housing Administration, which was formed in the midst of the Great Depression, when millions of Americans became homeless. The FHA is responsible for promoting home ownership by backing mortgages, especially for those Americans who lack the income to secure conventional loans.

Experts now predict that the housing crisis will continue well into 2008.
Fortunately, so far, the housing situation has not led to an all-out recession. However, the impact of the mortgage crisis may be felt in industries which help to support the real estate and construction industries.

Julie Ann Amos
September 19th 2007

Recent News

• Study Demonstrates Popularity of Check Cards
  A survey by Bankrate demonstrates just how much American consumers are benefiting from debit cards.


• Specter of Recession Looms in the U.S.
  The specter of recession is rising in the U.S., buoyed by the tidalwave of troubles in the stock market and housing sector. [19th September 2007]


• Fall is the Time for Re-evaluating Credit Card Options
  With fall just around the corner, many people—especially college-age people—may be re-evaluating their credit card options. This year, there are an endless number of possibilities for those seeking to expand their credit horizons [17th September 2007]


• Barclays Credit Business Reaches Milestone
  Barclays has become the fastest-growing credit card issuer in the U.S., based on figures just released by the company.[17th September 2007]


• Foreclosures in the U.S. on the Rise Again
  The number of individuals forced into home foreclosure is rising. Statistics show that the foreclosure rate jumped 9% in July over the previous month's totals. When compared with last year, the foreclosure rate is up an astounding 93%. [17th September 2007]