Query by iceshot1: hows the government handling the housing marketplace?

Ideal answer:

Answer by Baz
The US housing market place is in significant difficulty, far worse than in nearly any other developed nation. Since 2006, housing prices have fallen 30 to 40 percent in most areas millions now owe much more on their mortgages than their homes are worth, and millions a lot more have only slivers of equity. The typical homeowner today has 7 % equity in his or her home, versus 45 % as recently as 1990. The private housing finance program has virtually disappeared, and the government system that remains is pursuing the identical policies that created the current troubles. The affordable housing targets imposed on Fannie Mae and Freddie Mac in 1992 have been the major contributors to each the deterioration in underwriting standards between 1992 and 2008 and the development of an unprecedented ten-year housing bubble that suppressed delinquencies and stimulated the development of a private securitization marketplace for subprime loans. But other government policies are also to blame for the deterioration in the US housing marketplace, such as the thirty-year fixed-rate mortgage, the mortgage interest tax deduction, the appropriate to refinance with out penalty, and the Community Reinvestment Act. Until Fannie and Freddie’s industry dominance and the government’s role in the housing finance system are substantially decreased or eliminated, the United States will continue to have an inferior and unstable housing market.

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