GA+2009+Issue+1

Housing Crisis (Both economically, and the International Housing Crisis)
 * Will be focusing on providing affordable housing with improved facilities and environment
 * Key word for the housing crisis in the economic part: Subprime Loaners
 * Key word for the Housing Problems in Developing Countries: International Housing Crisis

Quick Definition: Sub prime Lender - A sub-prime lender is one who made loans to borrowers who did not qualify for loans from mainstream lenders.

Housing Crisis

1. What is the Housing Crisis

Todays Housing Crisis is mainly the issue of solving the problems of the sub prime loaners, and providing a shelter with a decent environment.

2. Economically

1. Government's overstimulation of the economy -Government encouraged house buying, which lead to the increase number in sub prime loaners.

2. The sub prime loans were packaged into investment products, and were flooded into the market. -Once the banks can't retrieve the loans, the bank won't be able to pay the investors, and a whole chain of people who brought and sold this "product" will fall. IN the end, they were just dealing with money that does not even exist.

3. In order to stop the collapse, or preventing the "bubble from bursting", governments prints out more cash to fill up the debts of the sub prime loaners. -This act could cause inflation and worsen the economy

4. (From my Old Journal) -First, the Real Estate is going to take a lot of blame. They showed properties, put buyers in touch with lenders and earned commissions. They dealt with appraisers and title officers, who also wanted to see deals close so they could generate fees. Also, since the end of the year 2001, housing-related industries have produced a whopping 43% of the nation's total net private sector employment growth. Obviously, therefore, any slackening of real estate activity would slow employment growth in the industry. Indeed, this massive job-creator could become a job-destroyer. The next people to blame, is the lenders. Mortgage brokers, banks and other lenders provided the funds so that unqualified applicants could buy homes. Brokers don't lend their own money but serve as middlemen, collecting commissions but sometimes without much regard to whether borrowers can make payments. Many banks weren't much better, selling loans to third-party investors while collecting fees. Plus, many brokers and lenders never verified a borrower's job status, income or assets because they were passing the risk along. These people are one of the reasons why that the people in America loves to use credit card to purchase things, since it was so easy to lend money from the bank. They had buried the seeds of leading to an economic crisis, since people found lending money is very easy, so the people started to buy things that they cannot afford. The borrowers were the main cause and victims of this economic crisis. Before the crisis hit America, getting a home ownership was very easy. Because many of the newest home buyers had borderline credit, they could qualify only for risky loans. Also, many borrowers did not understand their loan terms, and many of them weren't honest. Studies had shown that most sub prime loaners had lied to get the loan. Many of them soon found themselves in a situation that the money they owe is more than their homes worth. The investors were also the wire-pullers of this crisis. What happened is the lenders packaged the sub prime mortgages and other loans they generated for resale to investors on Wall Street, thus transferring risk down the line. Because of some of the investors does not know, or just does not care about who were the people that was getting the loan, and how risky it was, so once the loaners could not get their money back, the investors on Wall Street will also have to give the costumers of their products an explanation and payback, and a whole chain of people will fall for that. The Bear Stearns collapsed for those risky funds. The banks and the Federal reserves were also one of the key things that caused this crisis. The banks kept the interest rate low, so the people would save less, and invest more. Also, by boosting the nation's money supply too much, created an environment of easy credit, and encouraged a lot of unqualified loaners to loan and buy houses that they can't afford. The regulators, rating agencies all have blames also. The regulators did not do what they were supposed to do, and they had allowed too much investigations on risky loans, and did not regulate it just because they want to keep the big economic bubble up. The rating agencies had also let the unqualified people to get loans, and did not make the investments less risky and more secure. After listing all these that has responsibility in this crisis, we must stop the foolish acts of making a big pretty economy bubble, and focus more on the balance, and the stable development of a country's economies.

3. The Need of Affordable and improved housing

1. Slum Problem -The UN Human Settlements Programme (UN-HABITAT) estimates that 600 million urban residents and 1 billion rural dwellers in developing countries live in overcrowded housing with poor water quality, lack of sanitation, and no garbage collection.

2. Affordable Housing -Government's stimulation of the economy had caused the housing prices to rise, and also the value of currency to drop. This had made buying a house ever harder for the poor people -The UN Human Settlements Programme (UN-HABITAT) has been working to build affordable houses for the people who lost their homes in natural disasters, and people who can't afford a normal house with adequate environment.

3. Adequate Environment -Unsafe Water -According to the World Health Organization (WHO)'s World Health Report 2002, 98% of the deaths in the developing world were results from unsafe water, sanitation, and hygiene facilities. -in the Gaza Strip section of the Palestinian Occupied Territories, the already-scarce drinking water supply has become increasingly salty as rapid population increase and overuse deplete the regional aquifer, allowing seawater to intrude. According to Anna Bellisari, an assistant professor of anthropology at Wright State University in Dayton, Ohio, many Gaza physicians believe the excess salt is responsible for the area's high incidence of liver and kidney diseases. Chronic ingestion of salt can predispose people to hypertension, edema, and neurological problems, as well.

-Lead Exposure -According to the World Health Report 2002, 120 million people worldwide have blood lead levels between 5 and 10 micrograms per deciliter (µg/dL), with 40% of the world's children having blood lead levels above 5 µg/dL. For children, blood lead levels above 10 µg/dL are considered elevated by the Centers for Disease Control and Prevention (CDC).

-Indoor Air Quality -The uses of solid fuels such as wood, coal, and dung exposes people who use them to particulates, nitrogen and sulfur compounds, and benzene. According to the World Health Report 2002, indoor air pollution is estimated to cause 36% of all lower respiratory infections and 22% of chronic obstructive pulmonary disease in the world.

-Toxic Environments -Abandoned industrial sites such as Porto Romano are attractive to settlers because they offer buildings and utilities for the taking. These hazardous also offer the health risks associated with contaminated soil and water.

Reference from: http://www.ehponline.org/members/2003/111-2/focus.html

4. Provide the adequate housing with a decent price

5. The Top 10 Financial Collapses (Just a reference to how debts sub prime loaners could pull down major investment companies and even banks) -This lists few important factors, important causes, and victims of the Financial Collapse Link: http://www.time.com/time/specials/2008/top10/article/0,30583,1855948_1864602,00.html