In the 2000s, America tried to use a debt-fueled real-estate boom as a substitute for real wealth creation. The Fed’s loose money, government endorsement of private credit-ratings agencies and reckless promotion of homeownership created a housing bubble. The bursting of this bubble created a financial crisis. We do not want to repeat the experience, writes The Wall Street Journal.
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The danger of mortgage forbearances turning into foreclosures is rising as COVID-19 infections surge in the U.S., according to the Federal Reserve Bank of Atlanta.
There are 4.14 million mortgages in forbearance this week, a two-month low, after the number dropped 435,000 from last week, the largest decline of the pandemic, Black Knight said.