As most of us know, with the induction of the Obama administration into the white house there has been promise for a lot of economic changes nationwide. It is the Obama administration’s goal to help solve some of this economic crisis going on here in America. Part of that economic crisis has a lot to do with home foreclosure and people’s inability to pay their mortgages with the economic meltdown that has been engulfing our economy. The Obama administration has proposed a number of solutions to this problem but has yet to make a confirmed decision on the matter.

They are proposing a number of things, the first of which would be to freeze foreclosure for six months, disabling the foreclosure of homes and hopefully giving people enough time to stand on firm ground again. In doing this, people are expected to come out of their rut and handle the up and coming de-frost with as much responsibility as possible. In addition, the administration is proposing a double in the mortgage interest deductions that we’ve seen thus far among lenders in order to give people the chance to pay back their loan in affordable amounts. Lastly, the government is proposing a possible tax cut for those who are actually purchasing homes as an incentive for some responsible home purchases to help the mortgage companies see a return.
John Burns a home builders consultant with a lot of prominence proposes that the administration gives tax cuts that refund up to fifteen thousand dollars of a home buyers down payment as an incentive to get the borrowing party in the relationship to put up more of a personal stake, in addition it is his idea that if we double the interest deductions it will allow the borrower more spending money and a more disposable income which would not only help prevent future foreclosures, but would also stimulate the overall economy.
These courses of action are supposed to enable the lenders to get their full amount owed back, while allowing the borrowers some leniency to bail them out of losing their homes. Obama himself however has been more specific on one plan to help overly financially stressed borrowers is to allow the bankruptcy judges to lower the overall amount owed on homes by borrowers through an order to the banks. While most borrowers are fond of this plan, long-term lenders everywhere are opposing such a course of action.

Although many lenders oppose this plan, fair housing groups everywhere are boasting of the hundreds of thousands of foreclosures that could be prevented using this method. However with the banks in such financial trouble it is speculated that this may cause further collapse of the economy and while these solutions could be helpful people everywhere including Rosen of UC Berkley are saying that we are headed for trouble regardless of what solutions may be able to help, “Many people will lose their houses anyway,” he said. “They’re just stretched too far.”

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