Solving the Foreclosure Crisis

1034 Words5 Pages
How do we solve the foreclosure crisis? This question has been plaguing many people who are smarter and better educated than I am. But to them this is just an academic question, since they have probably never faced the problem of which bills to pay or whether or not to go to the doctor or fill a monthly prescription or pay the mortgage. For a lot of Americans these are the choices that have to be made each paycheck.

To solve the foreclosure crisis we must help these people to pay their bills and have enough money to continue paying their bills. The first step to doing this will be to give those with mortgages access to more of the money they earn. Since mortgage interest is already tax deductible, let us make it so the working American does not have to wait until tax season to access those funds. Allow them to work with their payroll department to figure out what their tax refund will be and divide that amount across their paychecks for the year, allowing them to have that money when they need it.

This process should be as simple as providing tax payers with a simple formula where they can input their income, and the amount they pay in mortgage interest and potentially mortgage insurance to determine how much less they should be paying each pay period. They would then need to provide this information to the payroll department of their workplace to implement these changes going forward. This simple step would not cost the taxpayer any money and it would provide homeowners with access to more of the money they earn each pay period.

The second step of solving the foreclosure crisis is to provide a tax break for existing homeowners. If the tax break is given based on the ratio of mortgage interest and insurance paid an...

... middle of paper ...

...Americans feeling like their country helped them in their time of need.

While during the recession there have been a great number of tax breaks and incentives, they have mostly been available to those who have money to spend. They do not address the issues for those facing foreclosure or assist those who do not have money to spend. This program would be available to all those who have mortgages with high interest and insurance to income rations, thus helping those who are most in need. This program will only have an opportunity cost, as a taxpayer may not receive any more assistance than they paid in taxes the pervious year, thus they can only receive benefit equal to their contribution. While this means their tax money cannot be spent elsewhere it does benefit everyone in the long run, by decreasing foreclosure rates, and therefore steadying housing prices.

More about Solving the Foreclosure Crisis

Open Document