When prices in 2009 and 2010 (Duca V.,

When taking into consideration the financial
crisis, it is also important to outline the efforts which were made by the
government and authorities in order to tackle the latter. In this case, all
actions which were adopted by the government served the main purpose to
increase the demand for houses in order to avoid the foreclosures. They tried
to create some incentives for lenders, which should revise and reschedule terms
and conditions of the troubled mortgages or at the same time to refinance
mortgages which amount exceeded the market value of the house. These actions
somehow also had an influence on lenders to be less aggressive and to use the
tool which represented foreclosure. Another dimension which is also reasonable
to mention is US Congress and their decision to introduce temporary tax credits
for people who represented homebuyers and overall this decision somehow had an
effect on housing demand and reduced the fall of housing prices in 2009 and
2010 (Duca V., 2013). Another actor, which was engaged in
this process is Federal Reserve. The latter tried to lower interest rates in
long-term because when there are lower interest rates in long term it somehow
promotes economic activity and such kind of approach induced different actors
of the financial market to buy mortgage back securities (MBS) and in addition
to this Federal Reserve bought some long term mortgage-back securities (MBS)
until the job market had not become sustainable because the sustainability of
the job market would give opportunity for borrowers to repay their mortgages
more effectively. These actions and moves from government and Federal Reserve
and also with another policy responses played important role in the process of
stabilizing the housing market. In 2012 the prices for houses started to get
normal and also home construction sector started to rise because of the normal
prices of the houses and the stabilization of the prices automatically had
effect on the foreclosures because at the same time the number of the latter
decreased steadily and this event was very important because the decrease of
foreclosures indicated that this long waited recovery of the housing market was
on its way (Duca V., 2013).


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