Fixing Housing Is A Must For Bank Recovery

U.S. housing and real estate market has to be fixed so that people who have real income won't be thrown out of their homes because their monthly payments are too high due to bad lending practices.

Housing needs to be fixed if mortgage-backed securities are ever going to regain their value. Read: Banks Look To Fourth Quarter Trouble

If the future of the recession rises or falls with housing, the economic trouble. According to The Wall Street Journal, "TransUnion LLC, which analyzed about 27 million consumer records in its database, predicted that the proportion of consumers with mortgages that are 60 days or more past-due will hit 7.17% in the fourth quarter of 2009." Given the number of homes in the US, that number is staggering.

If Congress, the Fed, and the Treasury have made one huge mistake it is that they have spent money on everything but housing. No real plan exists to reverse the rate at which delinquencies and foreclosures are rising. The programs are badly planned, and involve efforts by individual banks by individual banks with help from the FDIC.

According to the most recent data, the recession is at about to get much worse. It is a year old. Unemployment will certainly move above 7% by the end of the year. In the first quarter of 2009, it could rise to 8% and GDP could contract by 3% or 4%. It is very late in the game to go after the one thing that is undermining consumer spending and the financial and credit systems.

The delinquency rate projection makes one thing certain. In 2009, there will be no recovery, and things may get terribly worse.

This story is provided by 24/7wallst.com, where you can find more news on housing and financial markets.