Solving The Foreclosure Crisis

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Some measures that have already been taken in the foreclosure dilemma include a tax credit for first time buyers. This tax credit creates an incentive for younger people to purchase properties. In order to help this crisis, incentives need to be created to allow people to purchase and maintain payments on their property. Lenders also need to be given an incentive to take a loss and sell some properties. Creating incentives will allow the housing market to recover. If the current tax credit for first time buyers was extended to all persons, then more people will be inclined to purchase a property such as a second home or vacation home. The incentive of the tax credit will allow more people to purchase and improve some of these foreclosed homes. This tax credit should not only be extended to all home buyers, but the time limit should also be extended. If the tax credit was extended for a few more years, then buyers will have more time to make the decision to purchase a home. The decision for purchasing a house is usually a big deal, but if buyers are more secure in the time period they have to save up for that house, then they would be more inclined to purchase. The tax credit for all buyers will give an incentive to some purchasers that were not inclined before, but now, since the tax credit is in place, will decide to go ahead and purchase a home. The extended time period for this tax credit will also persuade some people to purchase a home because they have a longer period of time to prepare for it. Some buyers may not otherwise have enough time to save up for a down payment on a house, but if they were given enough time to prepare to purchase the home, then they might be ready. Some other changes that would prev... ... middle of paper ... ...entives for the home owner to continue making payments on their mortgage because of the lower payments. The buyer also receives an incentive if the government purchases the higher priced house and sells it at the market value. Incentives will assist the market’s equilibration and the stop of foreclosures. Extended tax credits to all home buyers and an extended time period will provide some incentives for people who would otherwise not purchase a home. Other incentives that would decrease the amount of foreclosures would be to create government subsidized loans or for a government program to purchase foreclosed homes and resell them at market value. To prevent future foreclosures, the government could allow lenders to create some barriers to purchasing mortgages. To help the dilemma of foreclosures the government should provide incentives to buyers and lenders.

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