A Solution to the Foreclosure Crisis: Stopping Urban Sprawl Essays

A Solution to the Foreclosure Crisis: Stopping Urban Sprawl Essays

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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...


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...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.

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