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A REVIEW OF THE ACTIONS TAKEN TO STEM THE U.S.
MORTGAGE CRISIS AND ECONOMIC RECESSION, THE
CURRENT ECONOMIC AND MORTGAGE
SITUATION


CHIAKU CHUKWUOGOR PH.D.

Eastern Connecticut State University, USA
 


ABSTRACT

This paper reviewed the actions taken to stem the last U.S. mortgage crisis and economic
recession. It examined the historical data for various periods and current data relating to the
economy and mortgage market and assessed the economic as well as the mortgage market
recovery against the background of the actions taken. The actions taken by the U.S. Government
to stem the real estate mortgage crisis and economic recession and stabilize the economy were
robust but more needs to be done. Evidence shows that the stock markets have fully recovered.
Even though the unemployment rate has declined to below the prior crisis rate, GDP recovery
has been anemic in spite of all the actions taken. The home ownership rate of 63 percent in 2016
is close to the home ownership rate of 62 percent from 1940 and 1960, about six or eight decades
ago. This rate does not compare favorably with the home ownership rate in countries like
China, Norway, Canada and Euro area. Evidence suggests that the actions taken have been
successful in stemming the foreclosure epidemic. However, house price recovery is challenged,
the increase in liquidity in the housing market, notwithstanding. New residential property sales
in the U.S. and the regions have recovered from the situation in 2011 but the level of sales is
below the sales recorded in the early part of the last decade. 

Key words: home ownership, mortgage, real estate, Gross Domestic Product, Treasury,
unemployment, foreclosures, Acts, crisis, banks, financial institutions

 

JEL Codes: G2, G21, G28, I31