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A Viable Solution to the Housing Crisis?

By
Real Estate Broker/Owner with Mission Grove Realty Inc.

flag.jpgI am re-posting this to see f anyone still feels this idea is any less viable than the current schemes that have provided banks with countless, and unaccounted for, millions.

It is easy to complain about the issue. We all hear it blasted across all lines of media and....in the workplace. Complaining about it, without the offer of a potential solution, no matter how far-fetched, just would not seem right so here is my offering :

Wipe the slate clean and start over.  The "bail out" schemes on the table  offer very little, if anything at all, to those who need it most. And, only a temporary band aid to hemorrhaging financial institutions and investors. Legislators have provided promises to "fix" the problem but are offering little in the way of an economically viable solution.

Forgive every mortgage, on a primary residence, of less than.....say $300,000.00 AND, let them keep their home.

  • Each household would be responsible for income tax on the forgiven amount with the ability to repay the tax obligation over 5-10 years.
  • Homeowners would be responsible for the property taxes and, if not paid when due (Barring extenuating circumstances) ownership could revert back to the original lender.
  • Only primary homes would qualify.
  • Homeowners must remain in their homes for a period of 5+ years (No rentals).
  • When sold, a percentage of the proceeds X% (after time limitation) would go to ???
  • Those applying for program must currently reside in their home.

Viable?

Think of the economic stimulus this could truly provide.

  • Homeowners would be able to complete home improvements putting contractors, construction workers and skilled laborers back to work.,
  • The car industry would have an immediate boost allowing auto manufacturers the ability to increase production putting thousands back to work and increase spending on "green" fuel alternatives.
  • disposable income, consumer spending could reach an all time high putting money in the pockets of everyone.  
  • Unemployment could drop to an all time low and confidence levels could rise dramatically.
  • Consumer saving levels could rise and investment firms could recapture some of the losses they are sure to take....at the expense of all of us.

Possible? 

Probable?

The alternative is to continue throwing BILLIONS of dollars at financial institutions....OUR DOLLARS. Money that certainly wont go to assisting those that are truly in need. Regardless of what is being promised. Is the current path working? It may be time to try something new before it is too late.

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Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate

Well, your idea makes a lot more sense except for the amount to be forgiven. That would differ for every area. $300,000 would be too high for our area considering it's pretty far above the median price range.

Mar 18, 2009 01:47 PM
Dave Roberts
Healdsburg Sotheby's International Realty - Healdsburg, CA

Nine months since you wrote this post, and I don't see any better ideas coming out of the government. All the programs they've tried so far are too limited to be of much use and haven't done anything to get relief to the most impacted neighborhoods. I don't have a better answer, but what we're doing isn't working.

Dec 22, 2009 06:25 AM
Christopher Walker
Mission Grove Realty Inc. - Hemet, CA
Local Broker and Realtor - Hemet & San Jacinto, CA

Dave, it will get far worse before it gets better and, I agree, what is happening is not working. BofA announced the pending release of over 600,000 properties during the first quarter of 2010 and that is just ONE financial institution. Just how many defaulted assets are out there is anyone's guess. Couple that with continued and increasing defaults and we are in for an interesting 2010 for certain. Much could be done to truly help the economy yet, little has truly been accomplished. The veritable ponzi scheme being played out on the American public is interesting though.

Dec 23, 2009 06:33 AM