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Housing & Foreclosure Crisis: A Guide for Research, Aid & Assistance   Tags: business_economics  

This guide contains useful information, but is no longer being updated.
Last Updated: Sep 13, 2016 URL: http://guides.library.msstate.edu/housing_foreclosure_crisis Print Guide

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About This Guide

The guide covers the broader issues of the ongoing housing and foreclosure crisis in the US that had its inception in 2005 as the housing market began its decline. 

Efforts to stem the crisis have ranged from the bailout or takeover of  financial institutions considered "too big to fail" to legislation aiding home buyers and owners attempting to avoid foreclosure. 

Throughout the crisis media attention has turned to the questionable lending and foreclosure practices of some financial institutions, and the phrases "foreclosure fairs" and "foreclosure mills" enters the nation's vocabulary as banks vacillate between abandoning property, allowing former home owners to live as "squatters,"  and enforcing the questionable seizure of presumably foreclosed homes.  This culminated recently in the October 2010 fiasco of faulty foreclosure practices that resulted in moves in all 50 states to freeze the foreclosure and seizure of property while investigations commenced. 

This guide provides links to resources for both academic research and personal aid and assistance.

For assistance with resources listed in this guide contact Christine Fletcher.

 

Acknowledgements

This guide began as sections in our Economic & Financial Crisis and Living In A Recession guides which were coauthored with Judy Li, Business Reference Librarian, and Jason D. Phillips, former MSU Librarian.

Resources for Following the Crisis

  • The Giant Pool of Money
    A special program about the housing crisis in terms that all of us can easily understand. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income?
  • Track the U.S. Economy
    This map allows you to track state figures on percentages of foreclosures and number of filings, unemployment, stimulus funds awarded and spent, jobs created/saved by stimulus, etc.
  • Reforming the Nation's Financial System: A Timeline
    Designed to help the public keep track of major financial regulatory developments, the site tracks Congressional and regulatory agency hearings and testimonies, new legislation, and key House and Senate committee member statements. The timeline begins with March 19, 2009, when the Senate Committee on Banking, Housing & Urban Affairs held its first hearing on Modernizing Bank Supervision and Regulation.
  • Foreclosure Resource Center: Federal Researve Bank of St. Louis
    Includes helpful links for the community planners, consumers, financial institutions and includes research resources.
  • The Financial Crsis: A Timeline of Events and Policy Actions
    In-depth timeline of the financial crisis with links to relevant federal government information, important documents and an FAQ on the crisis.
  • Housing Fiscal Crisis
    Links to documents, articles and reports that explain the crisis and its effects. A helpful list of recommended reading from Rutgers University.
  • Track the Stimulus: All you want to know about the economic stimulus plans
    Track the Stimulus looks to provide clarity on the economic stimulus plans launched by federal and local governments to re-ignite the economy. Track the Stimulus details where these investments are made, what jobs are being created and where, and attempts to measure whether these programs are achieving what they sought to achieve whether it is creating jobs, lowering the cost of borrowing to banks and corporations, etc. Includes information on housing plans.
 

Overview of the Housing & Foreclosure Crisis

This timeline is adapted from "Economic and Financial Crisis: A reverse chronological order of major events." created by Judy Li from the Economic & Financial Crisis guide.

Clicking on a link will lead to the details.

2011

April 13, 2011: The Senate's Permanent Subcommittee on Investigations releases the Levin-Coburn Report on the Financial Crisis: WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse. Press Release with summary and report and footnote links.

The report catalogs conflicts of interest, heedless risk-taking and failures of federal oversight that helped push the country into the deepest recession since the Great Depression.  High risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest, contaminated the U.S. financial system with toxic mortgages and undermined public trust in U.S. markets.  The report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story.
 
The Report offers 19 recommendations to address the conflicts of interest and abuses exposed in the Report. The recommendations advocate, for example, strong implementation of the new restrictions on proprietary trading and conflicts of interest; and action by the SEC to rank credit rating agencies according to the accuracy of their ratings. Other recommendations seek to advance low risk mortgages, greater transparency in the marketplace, and more protective capital, liquidity, and loss reserves.

2010

In Feb, European debt crisis raises caution flags.

The new Credit Card Laws take effect on February 22, 2010. On March 18, President Obama signs the Hiring Incentives to Restore Employment (HIRE) Act. This new $17.5 billion legislation (scaled down from an earlier $150 billion package) is of particular interest to businesses as it includes new tax benefits directly related to hiring employees and writing off investments in equipment.

In order to stimulate the economy, a program dubbed "cash for caulkers" has been touted by the president for months and is passed by the House on May 6.

President Barack Obama extends the deadline for first-time homebuyers to complete purchases and qualify for an $8,000 tax credit on July 1. He will sign theDodd-Frank Wall Street Reform and Consumer Protection Acttostrengthen consumer protection onvarious financial products. The House votes on July 22 (272 to 152) to push back the deadline to file for extended unemployment benefits until the end of November. President Obama is expected to sign the measure quickly so 2.9 million people would not bescheduled to run out of benefits by the end of the week.

May 10, 2010 | Fannie Mae Press Release

Fannie Mae reports a net loss of $11.5 billion in the first quarter of 2010, compared with a net loss of $15.2 billion in the fourth quarter of 2009. The Federal Housing Finance Agency, Fannie Mae's conservator, has requested the Treasury to provide Fannie Mae with $8.4 billion on or prior to June 30, 2010.

Fall 2010: The Financial Fraud Crisis Comes To A Head:

September 27, 2010: In An attempt to resolve issues with missing, lost, and fraudulent foreclosure paperwork, the Senate passes H.R. 3808 The Interstate Recognition of Notarizations Act of 2010by a verbal vote and without floor debate. The law requires all federal and state courts to accept legal foreclosure notarizations from out-of-state, including electronic-only documents.

By October 2010, the media begins reporting that mortgage servicers failed to accurately document the seizure and sale of tens of thousands of homes. All 50 state attorneys general temporarily halt foreclosures in each state pending investigations. MERS, the largest mortgage tracker in the U.S, is criticized for losing documents and sloppy practices.

October 8, 2010: H.R.3808 is vetoed by President Obama out of concern for conusmer protection.

2009

The American Recovery and Reinvestment Act 2009 (Pub. L.111-5) is signed into law by President Obama on Feb 17, 2009. The American Recovery and Reinvestment Act of 2009 expands the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1.

On March 1, 2009, the federal government agrees to provide an additional $30 billion to A.I.G. to loosen the terms of its huge loan to the insurer. The intervention would be the fourth time the United States has had to help A.I.G. stay clear of bankruptcy. The government owns nearly 80 percent of the A.I.G.’s holding as a result of earlier interventions, which includes a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.

On Apr 2, the G-20 (the Group of TwentyFinance Ministers and Central Bank Governors) from 20 countries (19 from the European Union) holds a summit in Europe and agrees to plan $1 trillion tofight Global Economic Crisis.

On May 20, Congress passed the Credit Cardholders' Bill of Rights Act of 2009 toamend the Truth in Lending Act. The bill is signed by President Obama to become a new law on May 22, bringing changes in early 2010 to restrict unpopular banking practices.

On Oct. 29, an increase in GDP at a 3.5 percent in the third quarter reported by the government, indicates a sign of ending a string of declines over four quarters since the Recession began.

On Nov 5, the government-controlled mortgage enterprise, Fannie Mae announces a program giving borrowers on the verge of foreclosure the option of renting their homes for a year. A bill extending unemployment benefits by up to 20 weeks is signed into law by President Obama on Nov 6. Legislation also extends the $8,000 tax credit for new homebuyers to April 2010 and creates a $6,500 credit for those who buy a home after living in their current house at least five years.

On Dec 3,President Obama urges banks to make 'extraordinary commitment' to help the economy in a White House meeting on Dec 14.

GDP of the year 2009

2008

On Feb 13, President Bush sings into law The Economic Stimulus Act of 2008 (Pub. L.110-185, 122 Stat, 613) in response to the demands of the Democratic and Independent parties as well as a minority of the Republican Party. The law includes a variety of economic stimuli intended to boost the economy in 2008, avert a recession and ameliorate economic conditions.

In March, two hedge funds owned by Bear Stearns (which invested heavily in the sub-prime market) collapse, and the company files for bankruptcy and is sold to JP Morgan Chase.

On July 12, Pasadena-based IndyMac Bank fails, making it the second largest bank failure in terms of total assets in U.S. history, and is taken over by the federal government.

In August, stock prices of government-sponsored entities Fannie Mae and Freddie Mac slide sharply and on Sept. 7, the Treasury Department takes control of these entities.

On Sept. 12, Lehman Brothers is in financial trouble. Top government and finance officials set up meetings to fend off bankruptcy, but the talks fall apart, and government officials refuse to step in and salvage Lehman as it had for Bear. Lehman’s failure causes significant consequences on the global banking system which becomes apparent in the following weeks. In order to avoid a similar fate, Merrill Lynch sells itself to the Bank of America.

On Sept. 16, American International Group, the largest insurance company in the United States, collapses under the weight of bad debts it took on insuring mortgage-backed securities known as credit default swaps and is bailed out by the Fed in an $85 billion deal. Even after that infusion, stock price drop anyway, falling nearly 500 points, and losses continue to mount. In Nov. the Treasury announces a new rescue package that brings the total cost to $150 billion.

On Sept. 18, Treasury Secretary Henry M. Paulson Jr. publicly announces a three-page, $700 billion proposal that would allow the government to buy toxic assets from the nation’s biggest banks to restore consumer confidence within the financial system.

On Sept. 25, the United States government seizes Washington Mutual Bank from Washington Mutual, Inc. and places it under the Federal Deposit Insurance Corporation (FDIC). The FDIC sells the banking subsidiaries (minus unsecured debt or equity claims) to JPMorgan Chase for $1.9 billion, which reopens the bank's offices as JPMorgan Chase branches. Washington Mutual Inc. files for Chapter 11 voluntary bankruptcy in Delaware on Sept. 26.

On Sept. 29 stocks plunge, with the Standard & Poor’s 500-stock index losing nearly 9 percent, its worst day since Oct. 19, 1987.

Negotiations start again on Capitol Hill. A series of tax breaks are added to the legislation and the Senate passes a revised version on Oct. 1 by a large margin, 74 to 25. The House follows suit, by a vote of 263 to 171. President Bush signes the Emergency Economic Stabilization Act of 2008, commonly known as The Bailout of the U.S. financial system, on Oct 3, 2008. The fundamental component of the Act, the Troubled Assets Relief Program ("TARP"), gives broad authority to the Secretary of the Treasury to purchase troubled assets.

GDP for the year 2008

2007

In March, the sub-prime mortgage industry collapses triggered by higher-than-expected mortgage delinquencies and home foreclosures. The year ends with more than 25 sub-prime lenders declaring bankruptcy.

The National Bureau of Economic Research declares teh U.S. has been in a recession since December 2007.

GDP for the year 2007

2006

The Housing Market slides further. The U.S. Economy in Review indicates a slow down in the economy in 2006.

GDP for the year 2006

2005

Real Estate cooled down considerably in the 2nd quarter of the year.

Housing Market slowdown has an effect on the economy.

New Bankruptcy Law is ineffective.

GDP for the year 2005

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Mississippi State University Libraries

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Christine Fletcher
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Assistant Professor/Government & Historical Resources Librarian
662-325-7680
Michell Memorial library, 2nd Floor
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