The slow pace of the economic recovery is due in large part to a chronic glut of pending troubled home loans and foreclosures across the U.S., according to the nation's leading economists.
Federal Reserve Bank of Boston President and CEO Eric Rosengren explained at a conference yesterday that residential investment typically grows rapidly during a recovery, providing an important boost to the economy. This time around, Rosengren points out, elevated foreclosures, a large inventory of vacant homes, and home price declines have stymied this.
A similar call was made last week by Moody’s Analytics chief economist Mark Zandi. “The economy is ready to emerge from its recent dark period, but to make it happen soon we need to speed the resolution of millions of troubled home loans” wrote Zandi in the Washington Post last week. His recommendations to put the economy back on course are “for courts to accelerate their efforts to work through their backlog of foreclosure-related cases, for regulators to pressure mortgage servicers to quickly implement the foreclosure process changes they have already agreed to, and for state and local governments to reevaluate the complex mediation efforts many have put in place.”
Vermont is fortunate to have a robust Housing Acquisition Rehabilitation Program that helps quickly move homes that have been foreclosed back into the hands of home buyers. After purchasing foreclosed homes from other lending institutions, VHFA makes extensive improvements to them, and offers them at greatly reduced prices to qualified buyers through assistance from the federal Neighborhood Stabilization Program.
Learn more about the Vermont’s Housing Acquisition Rehabilitation program
Read Eric Rosengren’s complete comments.
Read Mark Zandi’s Washington Post article.