Housing, without doubt, remains one of the most important economic stories of our day. As the below NYT article points out, a combination of factors including the unwillingness of private sector lending entities to fully reenter the market, damage to individual credit scores due to the Great Recession, scandals such as the recent Bank of America indictment, and as yet unsolved problems within our various systems of securitization (and the ways such systems are regulated), all lead to the conclusion that the United States is by no means out of the proverbial woods when it comes to fixing the underlying causes of the 2008 crisis.
Times reporter Gretchen Morgenson explains: â€œWith the government backing or financing nine out of 10 residential mortgages today, it is crucial to lure back private capital, with no government guarantees, to the home loan market. Mr. Obama contended that â€˜private lending should be the backboneâ€™ of the market, but he provided no specifics on how to make that happen. This is a huge, complex problem. In fact, there are many reasons for the reluctance of banks and private investors to fund residential mortgages without government backing.â€
Did you read that??? NINE OUT OF TEN! This obviously requires a lot more than speeches â€“ and that goes for private sector banks as well as the federal government.