OK, so here's my idea to help fix the housing crisis. Instead of forcing banks to not foreclose or giving money to people to pay their mortgages, how about this:
Help people move out of their current house and into a smaller, more affordable one.
This would be a lot more sustainable then just giving people money, and it would be a lot better than leaving people out in the street. If you just give people money or prevent banks from foreclosing, then even after the economy goes back to normal, people are still in hosues they can't afford. Maybe the government would pay for realtor fees or moving fees. This would get people into houses they should've been in in the first place. Then, when things come back to normal, they will be in a better place.
Maybe this helps housing prices increase, except for the most expensive ones. But I'd think this would reduce the total number of foreclosurs. Anyone else care to build on this idea?
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4 comments:
I like the idea. I kind of don't think it would be feasible to implement though because there wouldn't be enough smaller homes available to move people into.
i think it's more people (versus banks) that have put us where we are. People buy well out of their means and then make dumb decisions to counteract their first dumb decision.
my critisism of this housing solution (the governments, not yours) is that it doesn't teach people anything. What did they learn - spend more than you can afford, someone will save you, and then there are no major consequences or lessons to help prevent the same dumb decision to be made again. All they learned is that the government is willing to save their ass.
your solution, which more difficult to implement, is more realistic long-term.
My only question is what do you do with the house they move out of? The housing market isn't exactly the best for selling oversized houses.
I'm with Karen. I'm sick of people who don't take personal accountability for their actions, are quick to blame others, and expect everyone else to fix their mistake.
Yeah, people are dumb and have been making bad decisions, but lenders have been irresponsible, too. You really can't lay the blame entirely with one party or the other, but each has to partially take it on.
Here's an even better solution - have some of the people who are living beyond their means keep their big houses, but have their parents move in. This would solve a lot of other problems, too!
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