Has the home loan industry recovered?
Nearly a decade after housing prices peaked in 2006 and then crashed the following year, qualifying for a home mortgage has become an onerous process, with cautious banks enforcing ultra-strict underwriting standards. Mortgage lenders are struggling to find a balance where their lending criteria are strict enough to protect against defaults and government penalties, but flexible enough to allow creditworthy borrowers to qualify for loans. Compounding that struggle are a slew of new government rules for how banks must qualify borrowers, aimed at protecting potential homeowners from unscrupulous lenders; a secondary mortgage market dominated by the government and nearly devoid of private capital; and a generation of young adults who, for reasons ranging from high student debt to their preference for renting over owning their homes, are entering the mortgage market more slowly than their parents and grandparents did at the same age. Among the key issues: Has the mortgage market fully recovered from the subprime mortgage crisis? Should the government step out of the secondary mortgage market? Will higher mortgage interest rates kill the housing recovery?
Shiller, Robert J., “The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do About It,” Princeton University Press, 2008, with a new preface by the author, 2012. The 2013 Nobel Prize winner, Yale professor and developer of the S&P/Case-Shiller Home Price Indices offers six long-term solutions to avoid the problems that led to the rise of subprime mortgage lending and the 2008 financial crisis.
Warren, Elizabeth, “A Fighting Chance,” Metropolitan Books, 2014. The consumer advocate-turned-U.S. senator, widely considered the brains behind the Consumer Financial Protection Bureau, mingles her life story with political narrative and a scathing commentary on financial institutions.
Anderson, Eric S., “Maintaining Capital in the Secondary Mortgage Market: Housing Finance Reform and the Liquidity Coverage Ratio,” North Carolina Banking Institute Journal, University of North Carolina School of Law, 2015, http://tinyurl.com/
Pollock, Alex J., “How to Revive The Private Mortgage Market,” The Wall Street Journal, April 14, 2015, http://tinyurl.com/
Stevens, David H., “The New Housing Crisis?” LinkedIn, June 19, 2015, http://tinyurl.com/
Stewart, James B., “Eight Days: The battle to save the American financial system,” The New Yorker, Sept. 29, 2009, http://tinyurl.com/
Reports and Studies
“22nd Annual ABA Real Estate Survey Report,” American Bankers Association, May 2015 http://tinyurl.com/
“The Financial Crisis Inquiry Report,” Financial Crisis Inquiry Commission, January 2011, http://tinyurl.com/
“A House Divided: How Race Colors the Path to Homeownership,” Zillow, Jan. 15, 2014, http://tinyurl.com/
“Reforming America's Housing Finance Market: A Report to Congress,” Department of Treasury and Department of Housing and Urban Development, February 2011, http://tinyurl.com/
Bocian, Debbie Gruenstein, “Mortgages: The State of Lending in America and its Impact on U.S. Households,” Center for Responsible Lending, December 2012, http://tinyurl.com/
Lux, Marshall, and Robert Greene, “What's Behind the Non-Bank Mortgage Boom?” Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, June 2015, http://tinyurl.com/
Snowden, Kenneth A., “Special Report: Mortgage Banking in the United States, 1870–1940,” Research Institute for Housing in America, October 2013, http://tinyurl.com/
Zandi, Mark, and Cristian deRitis, “The Future of the Mortgage Finance System,” Moody's Analytics, Feb. 7, 2011, http://tinyurl.com/
The Next Step
Light, Joe, “As Home Prices Rise, the Foreclosure Crisis Continues to Recede,” The Wall Street Journal, Aug. 13, 2015, http://tinyurl.com/
Morrow, Matthew, “Are Zombie Foreclosures Killing the Neighborhood?” Fox Business, Aug. 6, 2015, http://tinyurl.com/
Svaldi, Aldo, “Denver leads nation in foreclosure of homes with positive equity,” The Denver Post, July 30, 2015, http://tinyurl.com/
Chandra, Shobhana, “Sales of New Homes in U.S. Increased 5.45 in July to 507,000,” Bloomberg Business, Aug. 25, 2015, http://tinyurl.com/
Collins, Jeff, “New home index seeks to predict market's future,” The Orange County [Calif.] Register, July 27, 2015, http://tinyurl.com/
Shell, Adam, “Wall Street sees hope in home sales,” USA TODAY, Aug. 20, 2015, http://tinyurl.com/
Harney, Kenneth R., “Already full of complications, closings may soon grow even more worrisome,” The Washington Post, Aug. 19, 2015, http://tinyurl.com/
Lipka, Mitch, “Get ready for electronic mortgage closings,” CBS Moneywatch, Aug. 5, 2015, http://tinyurl.com/
Pedersen, Brian, “New mortgage-disclosure law has agents, banks scrambling,” Lehigh [Pa.] Valley Business, Aug. 10, 2015, http://tinyurl.com/
Millennials and Housing
Boak, Josh, “More millennials stuck renting for years before buying home,” The Associated Press, Aug. 17, 2015, http://tinyurl.com/
Fried, Carla, “Here Come Cheap Mortgages for Millennials. Should We Worry?” Time, Dec. 10, 2014, http://tinyurl.com/
Martin, Susan Taylor, “Economist says millennials will determine future of housing market,” Tampa Bay Times, Aug. 14, 2015, http://tinyurl.com/