Discovering the cure to Foreclosure-itis

While economists have confirmed we are in a recession based on 2 declining quarters in the GDP and the latest jobs report, I find it important to point out at only a 6.3% unemployment we are far from the 25% rates that plagued our country during the great depression. Unfortunately that seems only temporary. In the latest jobs report an additional 533,000 people have joined the unemployment list and economists are forecasting the potential of an increase touching double digits.

The weak job market is only a component fueling foreclosure-itis, a progressive cycle symptomatically breading itself. It was reported almost 7% of mortgages were in arrears in the third quarter, with an additional 2.9% in the foreclosure process meaning close to 10% of households are at risk of foreclosure. That is staggering.

So how do we stop foreclosure-itis?

While there is no quick fix I have a few suggestions:
1. Eliminate capital gains taxes for real estate investors for 5 years
2. Bring back stated loans for self employed borrowers based on bank statement deposits
3. Demo vacant homes to decrease the oversupply of houses
4. Create low income housing grants that keep mortgage payments at the equivalent of market rent

If I have to pick only one the elimination of capital gains would spur investment into distressed assets and stabilize the real estate market. This in turn would calm the masses and return confidence to main street. The only question is with the Democratic party taking office could they conjure the cajones? ~Joshua Host