Utilizing Resources of the Private Sector to Help Solve the Foreclosure Crisis

Utilizing Resources of the Private Sector to Help Solve the Foreclosure Crisis

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The ensuing foreclosure crisis is one of great complexity. The problem has been culminating for years; signs of a “real estate bubble” began to surface as early as 2006. Despite the warning signs, the American economy continued to function, convinced that the “bubble” was not real or that its effect would be minimal. The numerous parties involved also adds to the confusion. Consumers, consumer banks, and Wall Street firms all had a part in causing the crisis. Ultimately, the global economy entered a terrible recession. Unable to maintain their sub-prime loans, many Americans were evicted from their homes. Economists and government officials have searched for ways to subdue the problem, as it continues to plague the entire economy. Although some progress has been made, there is still a great deal that could be done to solve the problem.
A possible solution to the foreclosure crisis must be bipartisan and combine ideas that conform to different ideologies. The best way to solve the problem is to utilize the resources and abilities of the private sector. Although the government can be helpful, the businesses must be at the core of the solution. In any financial crisis, the private sector is at the center of the problem. Most of the problems experienced by the public sector result from difficulties in the private sector. If the challenges are derived from the private sector, then the solutions should be as well.
The first part of the solution includes tax incentives. Financial institutions should be given a tax deduction for each mortgage that it refinances. Banks will keep track of all loans that are refinanced. A report of all refinanced mortgages will be sent to a government auditor who will investigate each of ...

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... allows financial institutions to refinance sub-prime mortgages while receiving tax incentives. The government will have a regulatory role in the plan, as government auditors will ensure that the tax incentives are only given for legitimately refinanced loans. The plan will give consumers an opportunity to get an appropriate mortgage. As lending practices are improved, the housing market will gradually recover. Meanwhile, banks will have excellent opportunities to increase revenues, while investment firms will have many opportunities for increased returns, without excessive risk. Ultimately, improvements in the credit and housing markets will contribute to a stronger economy. The future of the global economy is highly dependent upon credit. Solving the foreclosure crisis will allow the financial sector to recover, prompting a recovery of the economy at large.

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