[Aliantha]

I was watching 'world news' (a bit like the world series because it's all about one country) on the weekend and they had a segment about the effects of forclosures in Cleveland. There are 1000 repo homes in 1 zip code. The area is basically becoming a slum now because the empty houses are now home to crack houses and squatters or they're simply being defaced and pulled apart little bit by little bit.

This of course has meant that the people who have paid their mortgages now live in an area where the value of houses has slumped which in turn means their major asset is on the verge of becoming a liability.

While I was watching, the first thought that came to my mind was; where are all those people living now? What kind of stress is this causing in other neighbourhoods?

I got to thinking about this situation and thought of a way the government could step in but benefit all parties concerned, including themselves.

Rather than subsidise the mortgages, they should simply buy the house from the bank, then 'rent to buy' the house to the foreclosee on a long term deal (say 25 years). This benefits the community by not having empty houses prone to vandalism thus maintaining property values in the area. It gives the people somewhere to live with minimal disruption to children etc (which was a big concern from my perspective). It means the government has an asset which is also 'making money' for them. It means long term, the foreclosee either ends up owning the house anyway, or alternatively, the government can sell the house in the future when the market is in a more stable position.

Everyone wins.