MhproNews.com has learned from the HuffingtonPost that Federal Reserve Chairman Ben Bernanke says foreclosure is not a good way to deal with delinquent mortgage holders because it leads to deteriorating houses and depression of area home prices. In a report sent to the housing affairs and banking services committees of both houses of Congress, Bernanke says more effort needs to be made in refinancing seriously delinquent loans. He says the social and financial effects of foreclosed, abandoned homes becomes a long-term “deadweight loss” that negatively impacts the neighborhood in addition to depressing home values. Noting that housing prices have fallen 33 percent since 2006 with a $7 trillion loss in household wealth, he says mortgage servicers need to “aggressively” find an alternative to foreclosure. One option is to return the property to the creditor and allow the onetime homeowners to remain as tenants. The foreclosure process now requires 674 days to complete, three times what it took in 2007.
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