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Bail out Responsible Homeowners.

The housing market needs to fall and prices need to be realigned with what the population is earning. Although prices seem like they've fallen quite a bit already, this is only true if you are comparing them to what they were at the height of the boom. The boom was a result of many irresponsible groups of people who allowed overpriced houses to be sold to under qualified buyers. By implementing incentives and strategies to maintain or stabilize prices at this moment means we're attempting to stabilize house prices that are still above the means of the majority of families out there. The industry forgot that the value of an object is not what a seller wishes to make from it but what a buyer can pay for it.

 

 

Construction is in a downturn because there are no new homes needed with the current lack of demand for housing. When construction slows down so do all the other industries that rely on construction. As we've seen it's a pretty lengthy chain effect. To restart construction we don't need to invest in massive infrastructure projects we need the demand for new housing to rise. This can only be done if the current housing stock is removed from the market. There are two ways we can remove houses from the market. Increase the income of all working people so they can afford to purchase the homes at their current value. Let house prices decrease to a point where more workers can afford them. As the housing stock decreases there will be need for new construction. Construction firms will need to start rehiring again. As houses are purchased they will need to be refurnished, repainted, repaired, services that often require employing professionals will see higher demand.

 

 

There are many responsible homeowners that fear the devaluing of their homes and many are pushing for ways to keep houses at their inflated prices. What we need to do is give those responsible homeowners support for falling prices. Bailout money should be provided for those who have proven that they did not enter into a

subprime mortgage. Mortgage adjustments should be offered to those who have maintained a good history of payments. Those who haven't kept up payments or have chosen to strategically default should be foreclosed on. As they would be at any other time in history.

 

By preserving bailout money for those who entered subprime mortgages we end up making the responsible pay a hefty price of having to maintain a mortgage well above the real value of their house, while rewarding many who falsified claims about their earnings. The truth is the homeowners that need the support for falling prices are the ones who have done the work to tough out the recession. If we ease the pain of the idea of dropping values for those people then we can let prices correct themselves to real family income values. I think one of the worst things we can do to responsible people is to let them drown in the misery caused by others.

 

Support responsible homeowners with mortgage adjustments. Continue foreclosures. Let house prices fall. Wipe out housing inventory. Create demand for construction. Create demand for employment through construction. Create demand for employment for consumers looking to furnish new homes.

 

Or

 

Support delinquent homeowners. Keep housing market inflated and out of reach of most workers. Let construction reach a stand still. Let all industries related to construction fall apart.

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Idea No. 67