Solving the Foreclosure Crisis

1096 Words5 Pages
The foreclosure crisis was one of the harbingers of the coming economic recession. This was the issue that shifted the focus of the 2008 presidential election from the Iraq War to the economy. As one can imagine, many individuals and families are currently hurting as a result of this foreclosure crisis. High unemployment rates and lack of job creation leave very few options for already struggling homeowners. Because the housing industry composes such a large part of the American economy and affects so many Americans, it is necessary for the federal government to be directly involved in a solution to the foreclosure problem. Like the New Deal programs during the worst economic situation in history, the government must again be proactive in dealing with these extremely difficult circumstances and aiding American homeowners.

One way in which to solve the foreclosure crisis is to keep people in their homes. The most effective way to ensure this is to institute a foreclosure freeze, similar in purpose to the banking freeze of 1933. The freeze would calm anxieties about foreclosure and allow the housing market to stabilize. Calming these fears is probably the first step to solving the problem. Otherwise, panic will continue to wreak havoc on the housing market and the larger American economy. Supply would decrease or at least level out, possibly creating more demand and a slight increase in housing values. The important point here would be the stabilization of the market. Also, it would be rather pointless to continue building new homes when existing homes are being repossessed and there is no need to. Unfortunately, when new homes are not being built homebuilders do not have work to do. The effects of foreclosure reach ...

... middle of paper ...

...to the housing industry, it needs to ensure that the industry end some of its bad habits.

The federal government has a legitimate reason to intervene in the real estate industry at this current juncture. Not only is real estate a vital part of the economy, but keeping people in their homes is a vital part of the American psyche. Anything short of that would bring about chaos and turmoil. Keeping Americans in their homes would mean instituting a home foreclosure freeze, a government investment and assistance program for homeowners, and regulation of unfair practices within the housing industry. These steps are necessary to remedy this crisis and revive an industry. From this crisis and intervention by the government, the nation will hopefully learn from this experience and not repeat the same mistakes. For now, the focus should be on implementing sound policy.

More about Solving the Foreclosure Crisis

Open Document