By Jacque Johnson Bernanke recently sent Congress a letter and white paper discussing his insight into how the current housing market problems are impeding economic recovery. Acknowledging that the housing market is only one piece to the puzzle, he writes that "Restoring the health of the housing market [is] a necessary part of a broader strategy for economic recovery" and that "progress will come only through persistent and careful efforts to address a range of difficult and interdependent issues". The key issues he identified as needing to be addressed included: The excess supply of vacant homes due to foreclosures A downshift in the supply of mortgage credit The costs imposed on homeowners, lenders, and communities due to inefficient foreclosure process He argues that relying on foreclosures to deal with homeowners that can't meet their mortgage obligations is "costly and inefficient" and suggests that servicers "aggressively" pursue alternatives, such as: Converting foreclosed properties to rental units... Read more
