The truth is there is no simple solution to solving the foreclosure crisis, but there is a way to alleviate the crisis by creating the right incentives. Neighborhoods should have the option of using the policy of “Community Buy-Back.” This policy is one that I thought of and it is something that I see as working very well in common practice. People know that foreclosed properties lower surrounding properties values. No community wants their housing values to go down, so why not sponsor a community take back program? In this program if one house was foreclosed the community has the option of paying for the property through payments each month, like most people do to pay for their mortgage. Instead, it is the entire community mortgaging the property. Opponents may argue, why would someone want to pay for a mortgage for a house that they do not own? Well the foreclosed homes bought by the community would be used as the community wishes. It could be turned into an inn for when family and friends visit. It could also be used as a party space where people in the community could rent it out. In the end, the community might be able to turn this foreclosed property into something profitable. A way to further this profitable nature is to have the U.S. government offer to pay twenty percent of the payments per month of the foreclosed property. Banks will mortgage out the property at its foreclosed priced value, not its actual value.
To further prove the profitability I will use math to explain my idea. Say there is a $300,000 home that recently foreclosed. The bank is unable to find a seller by offering it for $200,000. The community decides to buy it from the bank, through mortgage payments for a $200,000 equivalent home for 20 years...
... middle of paper ...
...oosted property values becomes a total increased housing value as $1,000,000. Therefore, the total benefit far outweighs the cost.
With these two provisions America will finally be able to move on and recover from the foreclosure crisis of today. The government needs to invest at the source of the problem, the foreclosures themselves. Offering communities aid to buy up foreclosed properties will increase property values and will be one of the most cost effective ways the government can solve the foreclosure crisis. Second, by stopping further sprawl in rural and semi-suburban populated areas, it will keep property values up. Lastly, getting tough on banks and charging the banks for properties that are stagnant on the market will encourage banks to work with those who are about to foreclose and discourage banks from not mortgaging back to the neighborhoods.
In existence is $150,000, specifically set aside for the purchase of distressed real estate. This essay will outline a detailed strategy ensuring a maximum return in regard to the financial investment made on the home. Including a description of distressed real estate and foreclosure in addition to how utility can play a role in the decision-making process.
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens.
There is a solution to the Foreclosure Crisis. I do not propose that this is my own answer, but that it is born out of Love. The love for all my family and friends and the country as a whole is the reason for this proposal. Their fates and indeed the fates of our way of life in America depend on what we do at this time in history. The admiration and love for the foundation on which this country was established is an additional motivating factor. Needless to say we can neither turn our backs on all those who have shed blood and even given their very lives for the principles of our America. To allow this jewel of freedom and prosperity to falter and deteriorate would be the most monumental political plunder ever recorded. We can not afford to blow this opportunity.
It’s important to note that the solutions made above should be on a person-to-person basis and do not apply to everyone. Yet, if possible, it is to the best interest of all parties to see that these solutions are implemented. For in every city, in every neighborhood, and on every street, there is someone facing foreclosure. If not for the empathy of another’s pain, then look at it in terms of how it’s hurting you. If you’re a neighbor, you’re left with an unsafe, empty neighborhood and a house that’s worth considerably less because of it. If you’re a bank, you’re left owning a house with unpaid mortgages and annual property taxes. If you’re an investor, you see your shares decreasing in value which takes money out of your own pocket. The foreclosure crisis affects everyone, and it’s about time that we realize that.