The housing foreclosure crisis resulted from a housing price bubble fueled by easy credit doled out to high risk individuals by greedy and irresponsible bankers operating with a lack of regulatory oversight and then reselling their bad apples on the unregulated derivatives market. Moral Hazard as the Flip Side of Self-Reliance. It turned out that few, if any, Katrina evacuees actually did any such thing. A vast majority used debit cards issued by FEMA to buy necessities like food and clothing. But the damage was done: FEMA swore that it would never hand out money like that again.
Behind this brouhaha was an idea that Americans seem particularly preoccupied with. It is called “moral hazard” — an obscure term that has taken on new currency in our troubled economy. We’ve heard a lot about moral hazard lately, first in connection with the bailouts for big , and now with efforts to help homeowners who got in over their heads. Moral hazard sounds like the name of a video game set in a bordello, but in economic terms it refers to the undue risks that people are apt to take if they don’t have to bear the consequences.
Moral hazard became part of the national conversation in the financial crisis of 2008, when ordinary Americans wondered why they should rescue banks that helped drive the economy off a cliff. Kamala D. 3.5 Million Homeless and 18.5 Million Vacant Homes in the US. No fooling, National Day of Action for the Right to Exist: April 1st | WRAP News. The Future of Housing Finance. Fannie Mae and Freddie Mac, government-sponsored enterprises that played a prominent role in the financial crisis of 2008, and the federal government have come to a crossroads. The government must make key decisions about their structure, and indeed, their very existence. The government has played an important role in the American housing market since the early 1930s, when the Great Depression ushered in housing programs to promote a stable society.
The government's role expanded further during the recent housing and financial crisis—Fannie Mae and Freddie Mac now dominate the American housing market, backing more than 62 percent of new mortgages and holding more than $5 trillion in accumulated mortgage risk. In The Future of Housing Finance Martin Baily and his associates discuss the issues and options that policymakers face as they reassess the government's role in the U.S. residential mortgage market. Specific topics include: What's Inside 1. 2. 3. 4. 5. 6. 7. Investors Aim to Buy Thousands of Homes to Rent to Tenants. States Diverting Mortgage Settlement Money to Other Uses. In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for prevention, investigations of financial fraud and blunting the ill effects of the housing crisis.
California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the state’s debts. The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes. The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.
In Texas, $125 million went straight to the general fund. But Mr. Hours-At-Minimum-Wage-Needed-To-Afford-Rent.png (PNG Image, 1067 × 802 pixels)