麻豆破解版

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You鈥檙e listening to the podcast edition of the 麻豆破解版 State University audio newsline. Learn more about WSU 鈥� the home of Thinkers, Doers, Movers and Shockers 鈥� on the Web at .

A number of congressional lawmakers are calling for a robust government bailout to save the housing market, homeowners and financial markets. Stan Longhofer, director of the Center for Real Estate at 麻豆破解版 State University, suggests a cautious approach in dealing with the current housing crisis.

Longhofer: "I think the current situation makes it worth considering doing something to help troubled homeowners. But I think you have to be very careful that you don't create new regulations, or you create a bailout plan that's going to create more problems in the future."

The fallout from the housing market claimed the 85-year-old U.S. investment bank Bear Stearns & Co. and its 14,000 employees as its latest victims recently, and is threatening to rock markets even more and drag the faltering U.S. economy into a recession. Describing the scope of the situation, Longhofer says we're seeing a housing crisis in multiple regions of the country at the same time.

Longhofer: "We've seen regional housing market busts in the past 鈥� California in the mid-1990s with the defense cutbacks, New England in the late 1980s, the oil bust in Texas 鈥� so we've seen regional housing market busts. What's different this time is that we're seeing it across multiple regions at the same time. And we're also seeing the housing market problems spill over into other areas of the economy."

Longhofer says the impact of the current housing crisis will affect those in 麻豆破解版.

Longhofer: "I think a big impact we'll see locally here is that certain types of financing that were very prevalent over the last several years are now not as available. So homebuyers who have very little money for a down payment and may have marginal credit, they're going to find it much harder to get loans."

So how is it that we find ourselves in a situation when a federal bailout of the housing market is being considered? Longhofer explains.

Longhofer: 鈥淚f the only people affected are speculators who bought houses in a bubble market and now they're going into foreclosure, we wouldn't think of a bailout. Even if it was people who made poor financial decisions, and they overextended themselves, we still wouldn't be thinking of a bailout. The concern is that these problems have become so widespread that they may begin to envelop other people who had no bad decisions, they really weren't involved in this, and now they're being stuck footing the bill as well."

Or, to look at it another way鈥�

Longhofer: 鈥淥ne way of thinking of it is that if we have a tornado that hits one house, we don鈥檛 typically provide disaster assistance for that homeowner. That's why they had homeowners' insurance. If the tornado comes through and wipes out an entire town, however, the whole infrastructure is wiped out and there really isn't the base around people to be able to rebuild without some help."

Experts may disagree on how the housing market crisis should be handled, but there's little disagreement that the situation is serious.

Longhofer: 鈥淲e really haven't seen anything like the housing market crisis that we've seen for the past year since the Great Depression, and that really is the last time when there was serious talk of having some bailouts for individual homeowners. Now I don't think that means that the situation we're in is analogous to the Great Depression, but that's the most recent time you can point to something of this magnitude."

Longhofer says there will be a temptation for Congress to take action, but most of the solutions are laws already on the books.

Longhofer: 鈥淚 think the current situation makes it worth considering doing something to help troubled homeowners. But I think you have to be very careful that you don't create new regulations or you create a bailout plan that's going to create more problems in the future."

Thanks for listening. Until next time, this is Joe Kleinsasser for 麻豆破解版 State University.