This website uses cookies to ensure you have the best experience. Learn more

Solution To The Foreclosure Crisis: Return To The Ancient Practice Of Bartering

1226 words - 5 pages

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.

The Problem
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.
One solution
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...

Find Another Essay On Solution to the Foreclosure Crisis: Return to the Ancient Practice of Bartering

A Practical Solution to the Foreclosure Crisis

1070 words - 4 pages . Negative equity occurs when a homeowner owes more on their home than it is actually worth. This problem is commonly caused by actions mentioned in the second paragraph, and results in the highest foreclosure rates of any other given reason. In order for the foreclosure crisis to be adequately dealt with, the issue of negative equity must be at the forefront of solution discussions. Now that one has a clearer idea of the factors that contributed to

A Solution to the Foreclosure Crisis

1225 words - 5 pages I can provide a solution to the foreclosure crisis with a two part plan that will provide increased home equity and employment. The plan provides loan modification opportunities, financial rebates and new jobs in infrastructure construction and alternative energy resources. There are many flaws with the United States current plan of action and it all begins with our president’s $650,000 program. President Obama’s Mortgage Relief Program is

Solution to the Foreclosure Crisis: Lending Laws

1606 words - 6 pages purchase a property that is either in the process of foreclosure or one that has already been foreclosed upon. They feel that is where they can find the best deal. That is all well and good. The problem is that the banks, in many instances, cannot seem to make that process run quickly and efficiently. Buyers are frustrated. The real estate market bogs down. One solution to the foreclosure crisis is to get out of it as quickly as possible. It will help

A Solution to the Foreclosure Crisis: Stopping Urban Sprawl

1237 words - 5 pages The truth is there is no simple solution to solving the foreclosure crisis, but there is a way to alleviate the crisis by creating the right incentives. Neighborhoods should have the option of using the policy of “Community Buy-Back.” This policy is one that I thought of and it is something that I see as working very well in common practice. People know that foreclosed properties lower surrounding properties values. No community wants their

Three Part Solution to Solving the Foreclosure Crisis

1029 words - 4 pages rates began to rise and housing prices started to drop in the United States, refinancing became more difficult. The United States needs to bounce back from this foreclosure crisis and it needs to happen quickly. There are three parts of my solution which consist of a limit on adjustable rate mortgages (ARM). Another is a law that requires banks and lenders to use a more complex background check for potential home buyers. Lastly

Trade-Down Home Exchange Program: My Proposed Solution to Solving the Foreclosure Crisis

1369 words - 5 pages The home foreclosure situation is a daunting problem. As a nation, we need to examine the root of the problem, explore available options, implement new ideas and programs that have the best projected outcome and then review to determine successfulness of the changes. Before becoming an educator, I was a mortgage loan officer. I know, first hand, how stressful purchasing a home can be and the frustrations that hang on financial hardships and

Foreclosure Crisis Solution: Saving to Buy a House

1169 words - 5 pages and most technologically powerful economy in the world, we are becoming an entitlement society. There is one possible solution to help this crisis all over America. Banks should require people to pay 20% or more down on a house before they can buy it. The prices of the houses would then fall to more affordable levels because they would not be able to find a buyer, almost forcing the seller to lower the price. Another part of the solution would

Foreclosure Crisis Solution

830 words - 3 pages Foreclosure is a very sensitive topic and one that almost everyone decides to look up to the tax payers to solve. This is not a feasible option, like tax relief or programs of payment assistance as that only adds to the economy spiraling down and not solving issues for the homeowners. When faced with a person who is going through foreclosure the main concern of the lender is getting their money back. The capital invested in the buyer to

How to End of the Foreclosure Crisis

1700 words - 7 pages How to Get Out of the Foreclosure Crisis Our nation is indeed in a crisis in regards to foreclosures. I believe the approach to take to solution would be to thoroughly examine how the crisis occurred and resolve that situation. However, that would be a short term solution. I recommend that we also consider how to prevent the situation from occurring again, thus presenting a long term solution. Let us look at the components of the current

Solutions to the Foreclosure Crisis

1004 words - 4 pages The foreclosure crisis is tearing away at this economy causing people to loose their house and be in national debt for long amounts of their life times. More people are filing bankrupt because they can’t afford to pay the adjustable interest rates that they set when signing loans for their houses. Now the economy is at a vast down turn, slowly turning up to becoming better internally, but still people are homeless due to their homes being

Solutions to the Foreclosure Crisis

1111 words - 4 pages Federal Deposit Insurance Corporation, houses stopped selling, people were laid off in the financial industry, the stock market deteriorated, and realtors were not making any commissions because home sales stopped dead in their tracks. Worst of all people searching for The American Dream are facing foreclosure. I think that we need to get back to basics as far as the mortgage crisis is concerned. During the last 15-20 years there have been too

Similar Essays

Solution To The Foreclosure Crisis Essay

1131 words - 5 pages My family has been severely hit by the foreclosure crisis. My mother lost her home in 2005 and my father is having problems paying his monthly mortgage and almost went into foreclosure last month. The foreclosure crisis is not just something you see on T.V.; it has invaded our private lives. What I find most disturbing is the massive amount of bailout funds that were given to big companies that were about to go bankrupt. Billions of

Solution To The Foreclosure Crisis Essay

1544 words - 6 pages The solution to the foreclosure crisis requires cooperation among the borrower, the mortgage lender, and the federal government. Current proposals by President Obama’s administration call for federal government intervention through interest rate subsidies for refinancing stressed mortgages, guarantees of mortgage-backed securities buyouts, and funding to fill gaps in reduced monthly payments as an incentive for lenders to work with borrowers in

A Solution To The Foreclosure Crisis

1035 words - 4 pages The foreclosure crisis has reached new heights since the all-time high deficit in the economy. U.S. foreclosure rates went up more than 81% and 861,664 families lost their homes to foreclosure in 2008 (Les Christie). Also, 54 households received a foreclosure notice last year (Les Christie). So what is the solution? Bold action is needed to address this serious issue. I suggest a “real estate pause” for a temporary amount of time

Proposed Solution To The Foreclosure Crisis

1310 words - 5 pages afforded us is a wiser use of those resources. As it was no single instance or policy that created the crisis, there will have to be a more comprehensive solution. 1. Separate the disciplines. Create a division of pre-purchase home ownership counselors and foreclosure mitigation specialists. Provide the funds needed to not only train them, but require certification and licensing. Just as realtors, builders and appraisers are required to be