Brimingwith research notes the US Housing markets repeats a
cycle that first became noticeable in the 1990s. The Resolution
Trust Corporation (RTC) was a U.S. government-owned
entity established to liquidate
insolvent Savings and Loans (S &Ls) caused by bad and sometimes fraudulent
mortgage loans. There are very few
remaining S & Ls today.
http://www.marketplacelists.com/mutual_savings_banks.htm
During a period from
1989-1996 interest rates at which S
& Ls could borrow increased. The
S&Ls could not attract adequate capital from such sources as member deposits.
They became insolvent. Rather than admit to insolvency, lax regulatory
oversight allowed some S&Ls to invest in highly speculative investment
strategies. This had the effect of extending the period where S&Ls were
likely technically insolvent. Fraud in
the industry was rampant. Illegal land flips and other criminal activity ruled
the day.
From the period from 1986-1995,more than half
of the nation's Savings and Loans with total assets of more than $500 billion, had failed. By 1999, the crisis cost $160
billion, with taxpayers footing the bill for $132 billion
with the S&L industry paying the rest.
This crisis
accounted for a large part of the early 1990s budget deficits. With our
current economic crisis and having 26,000,000 Americans unemployed or underemployed, we repeated essentially what happened in the 80’s
and 90’s.
In the current crisis fraud was
unprecedented with sellers, buyers, and financial institutions inflating the
price of properties, using straw buyers to purchase properties where they have
no intention of making their residence and “no income, no assets” loans and
sell of deficient subprime mortgage backed securities nearly wiping out an
entire generation of pension plans.
Although, the housing situation has
improved with government bailouts and foreclosure prevention programs for
homeowners. According to a HUD In all, more than 10.1 million mortgage modifications and other forms of
mortgage assistance arrangements were completed between April 2009 and the end
of November 2015.
More than 2.5 million homeowner assistance actions have taken
place through the Making Home Affordable Program, including nearly 1.6 million
permanent modifications through the Home Affordable Modification Program
(HAMP), while the Federal Housing Administration (FHA) has offered more than
3.0 million loss mitigation and early delinquency interventions through
November. These Administration programs continue to encourage improved
standards and processes in the industry, with lenders offering families and
individuals more than 4.6 million proprietary modifications through October
2015.
Now, not only are cities saddled with abandoned property as population diminished particularly in rust belt areas but they are now riddled in every zipcode with foreclosures.
Codes requiring security and maintenance of properties
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