The foreclosure crisis is firmly set in this country and has proven to be a large-scale problem that’s not easily treatable. One of every five mortgage holders now has a home worth less than the mortgage on it (ElBoghdady A1), according to First American CoreLogic, a firm that tracks mortgages and provides data for The Washington Post. The recession has made it tougher for people to pay their mortgages, and crashing home prices have left many borrowers feeling like they are under water. The solution may not be a single clear answer, but one thing seems certain: it’s important to be creative in finding an answer to this problem. My idea is simple. Return to the “old economy” of bartering.
The idea may sound odd, but in practice people have been bartering for thousands of years. People have swapped everything under the sun, including houses. Swapping homes was a common practice in eastern Russia during Communist rule, says Sergei Naumov, president of NowMoves Inc., a St. Augustine, Florida based company that owns GoSwap.org (Barlyn 1). Homeswapping, or permanent house trades are also growing, as homeowners trapped in a sluggish market are joining the bartering community.
Borrowers are finding themselves unable to sell or unqualified to refinance their way out of trouble. This is a big difference from the nation’s home financing situation just a few years ago when practically anyone qualified for a loan. Some of the financing problems have resulted from various lenders wooing borrowers with generous terms they once reserved only for borrowers with outstanding credit. Eager mortgage financiers started buying more of these loans, and basically subsidized the market. In its current state, the housing market is in dire need of stimulation to bounce the number of buyers back to healthier levels.
One of the most common issues that holds back potential buyers is a financing problem. They can’t borrow enough money to buy a new house until they sell their old one. With a smaller number of buyers in the marketplace, the likelihood of this happening is lessened, and the problem continues to spiral.
Because the problem is so widespread and deeply set, the housing crisis needs some creative thinking. This is a perfect time to revisit the “old economy” and encourage a return to a bartering system.
The timing of this solution is ideal because the nation is just now becoming familiar with the concept of houseswapping. Permanent house trading has been in the media spotlight since 2007. When the topic is brought up in a conversation, most people have at least known someone who has been involved in a houseswap.
How will it work?
Several internet sites have already been established with the goal of facilitating house trades. We should look to these existing examples for a quality framework. The benefit from this will be the ability to look at real examples in the marketplace that yield some important lessons. The other benefit...