While Congress deliberates on the future of the nation’s mortgage market, some within the government are calling for restraint in regulatory reform. Housingwire.com reports William Emmons, an economist at the St. Louis Fed, is calling for patience and social support as the clearest way to economic recovery.
Emmons makes the argument that government intervention, particularly measures aimed at postponing or eliminating the foreclosure process, will only serve to further tighten the credit crunch that already holds the nation’s economy in its teeth. Instead, he believes Federal funds and regulations should be aimed at helping foreclosed homeowners recover from their unsuccessful forays into homeownership. By focusing on the “cause,” rather than the “symptoms” of our current economic woes, and by allowing markets to sort themselves out, Emmons argues prudent, forward-looking regulatory reforms offer us the fastest route to economic health.
Whatever your opinion on upcoming regulatory reforms, it is clear the actions of the government in the coming months will have a massive impact on housing markets and the economy as a whole. Reforms that promote a healthy and functioning mortgage market while protecting borrowers from the types of abuses so prevalent during the boom will allow investors and homeowners alike to make the right choices in the coming years.
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