San Diego foreclosuresToday’s economy is about as difficult an economy as we’ve seen in the last hundred years. The housing sector, blamed for much of the economic downturn, has been particularly hard hit. No matter what side of the political aisle you fall on, most Americans believe that the government needs to have some role in helping to lift the housing market out of the dumpster. The magnitude of the crisis is simply too overwhelming to expect cyclical changes and private investment to do the job all on their own. Certainly, real estate speculators, renters, homebuyers and landlords all have a role to play in the housing recovery. Foreclosures won’t end until developers start buying up vacant properties and average property values begin to rise. Investors may never see the kind of returns that they experienced during the bubble years of the late 90s and early 00s, but there is still some room for expansion. In order for housing to recover in this country, the government is going to have to intervene and bring some relief to the American people and suffering homeowners. Consider these three actions that the federal government can take to relieve the pressure on the housing market and put an end to the epidemic of foreclosures.

Guarantee Home Loans

One of the biggest drags on the recovery, especially in the real estate market, has been the credit freeze. It has become so difficult to get a loan in this country that people are having trouble making their existing mortgage payments, not to mention being absolutely unable to get preapproved for a new mortgage. Money lenders have become timid. The government can help ease this credit crunch by guaranteeing safe home loans to make lending safer and more attractive. The government may even see returns on some of these guarantees that can be counted as revenue.

loan house

Legally Stop Foreclosures

This one’s a no brainer. The minute the foreclosure epidemic began its funeral march across the country, the government should have taken legal measures to prevent foreclosure. Any effort to slow the process of removing Americans from their homes would have bought the housing market time to adjust.

Invest in Depressed Sectors

New investment raises home prices and makes home buying in depressed areas a more attractive proposition.

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