How to improve the real estate market
If the housing market collapses, it can take the rest of the
economy. If home prices of homeowners with little equity can fall into their
homes quickly determine that they owe more than their homes are now value. This
increases the risk of defaults and only lowers prices further foreclosures and
the flood of foreclosures. There are a number of strategies of Governments,
banks and private industry can be less risky and more stable to make the
housing market. It remains to be seen whether these strategies are implemented.
1 Tax credit make promoting affordable home ownership and
houses with a refund. The Government has implemented spur such a tax credit for
activity in the housing market, but increasing and extending the tax breaks
could be to encourage even more investment in housing.
2. Reduce the availability of exotic mortgages and
no-money-down home loans. House - and homeowners have no equity and little
capital at risk are more likely, to walk away from an underwater mortgage, and
large quantities of these defaults can lower prices.
3. Force the banks, the Government, the mortgage, including
the principal for homeowners who have lost their jobs or suffered other
financial difficulties to change deposit money. This is more and more
homeowners in their homes, and ease the foreclosure crisis, which drives prices
down.
4. Which require banks, they write rather than held to keep
the mortgages and sell them to investors. If the Bank is forced to take the
risks associated with the loans, which they write, they are careful to lend
them the money.
5. Lending standards for mortgages to tighten. Promotion of
homeownership is a worthy goal, but give credit to people who can't afford the
payments, is a recipe for disaster.
6. Would-be homeowners about the true cost of owning a home
to educate. Many new homeowners are not aware of how much you can really
afford, and the default value, this increases the possibility of on the road.