Inquiring minds are digging into a Fed white paper regarding The U.S. Housing Market: Current Conditions and Policy Considerations.
Here are a couple of key snips. The bold headings are mine.
Overriding Private Contract Rights
We have not been shy about exposing the massive (and unsustainable) bubble of credit being blown into the economy via Student Loans from the government. We have not been afraid to note the dramatic rise in delinquencies among these loans - and the implications for the government.
The growing debacle that is the US student loan bubble - nearly the same size and severity as the Subprime crisis at its peak- has been painfully dissected on these pages in the past, so at this point the only thing remaining is to keep track of the bubble growing exponentially in real time as it hits all time records, and eventually pops.
Chart showing loan default rates for real estate, consumer and agricultural loans for 1998 to 2009 by the Curious Cat Investing Economics Blog, Creative Commons Attribution, data from the Federal Reserve.
As you can see real estate default rates exploded in 2008.
A high percentage of owners who take part in the Home Affordable Modification Program are unable to maintain their loan mods, data show.Financially strapped homeowners who are close to foreclosure may want to face the music now rather than continuing to struggle with their monthly payments.