Thursday, July 31, 2008

A Low Cost Solution to the Housing Crisis

Foreclosure tours?
It was a foreclosure bus tour hosted by the city -- the first in the state to offer such tours as a public service, according to the New Jersey League of Municipalities.

In Florida, California and Michigan, where the housing foreclosure crisis has hit residents especially hard, these tours are becoming the rage among real estate agents. In New Jersey, which according to RealtyTrac, a firm that monitors foreclosures, saw a 140 percent jump in foreclosure filings over the last three months, real estate agents are catching on.

Tours are being organized in Sussex, Morris, Union and Warren counties and along the Shore. But this one was different: It was designed not only to help first-time buyers get an affordable home, but to keep troubled homeowners above water.

"Maybe it's better to call it a 'pre-foreclosure tour,'" said the city's housing program director, Susan Ucci. "We want to prevent people from going into foreclosure."
Well, this appears to be the kind of solution that should work to match up prospective buyers who have solid credit and have been unable to afford homes because of the runup in prices and sellers who have been unable to meet mortgage payment commitments.

Some of the tours are run by non governmental organizations and others are run by real estate companies. Either approach works, and it is a brilliant idea since it solves two problems at once. It matches up affordable housing with those who most need to sell to get out of their sticky wickets.

Instead of pumping money into the real estate market that will only drive up prices, this takes advantage of the market situation to benefit those who are on solid fiscal ground and matches them up with those who are struggling to stay afloat.

Instead of creating a whole new bureaucracy to solve what is nothing more than a market correction in both the housing market and the financial markets who didn't recognize risk in subprime housing markets, we get a simple and low cost solution that helps all involved.

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