Fed Chief Confirms Housing Predictor Forecast

Federal Reserve Board Chairman Ben Bernanke has confirmed the Housing Predictor forecast that more than 2 million homes will be foreclosed as a result of the sub prime lending crisis.

In a hearing before the Congressional House Financial Services Committee in Washington D.C., Bernanke essentially confirmed the Housing Predictor forecast issued in early June, saying more foreclosures will occur as a result of fall out from the sub prime debacle.

However, he differed with one congressional committee member’s estimates that 1.5 million foreclosures would occur alone in 2007. Bernanke conceded that the rate of foreclosures caused by the nation’s sub prime crisis would worsen in 2008 and 2009 without citing any figures, but agreed the figure would go into the millions.

Bernanke made his comments in semi-annual testimony before a congressional committee, which is looking into ways to assist the nation’s lending economy to help resolve the sub prime crisis. The Chief Fed Chairman deplored “abusive lending practices and outright fraud” in the wake of near record foreclosures caused by the sub prime crisis.

The Housing Predictor forecast was based on an analysis of the nation’s largest metropolitan real estate markets conducted over a one month period by a team of researchers and journalists. Housing Predictor forecasts more than 250 local housing markets in all 50 U.S. states.

The web site is regularly consulted by many of the nation’s foremost Wall Street investment houses, mortgage and real estate companies, and consumers for its forecasts, which are updated regularly as local market conditions demand.Foreclosures are at near record levels in Michigan, Minnesota, Ohio and Colorado. Other states that are experiencing the highest number of foreclosures include California, Alabama, Indiana and Mississippi.

However, the fall out from the sub prime meltdown is not extending into all of the nation’s housing markets on a widespread scale. Foreclosures are occurring more commonly in lower middle class and poorer neighborhoods. Many housing markets, including vacation and second home markets and higher priced areas are immune from the fall out of foreclosures.

Eighteen states real estate markets are appreciating and an additional 10 states housing markets are showing signs of stabilizing. Many of the foreclosures are occurring as a result of increases in adjustable rate mortgages, and unethical lending practices on the part of some mortgage borrowers and lenders.

Article Source: http://www.contentspool.com

Mike Colpitts is the Editor of Housing Predictor. To read the entire foreclosure forecast, check local market forecasts and search real estate listings visit www.housingpredictor.com

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