Preventing Foreclosures Should Be One of the New President’s First Actions

Whoever between Barack Obama and John McCain is elected U.S. president on November 4, 2008 will have to work with great urgency, together with his advisers, members of Congress and agency heads, to create remedies to solve mortgage and foreclosure problems and establish policies to revive the housing industry.

Even before the newly-elected president assumes the presidency in January 2009, it is widely believed that he would begin considering various strategies to revamp and energize the housing and financial sectors to be able to put a stop to the soaring number of Americans losing their homes to foreclosures.

This article has seven recommendations to the incoming President, the first of which is to determine the future roles of the two housing-related government-sponsored enterprises (GSEs), Freddie Mac Foreclosures and Fannie Mae Foreclosures. The agencies were put into conservatorship by President George Bush in 2008 to protect them from collapse until their future roles can be established.

The second recommendation is to establish a better finance system that could be used by home builders who have been struggling to sell since the avalanche of repo properties, specifically foreclosure homes.

Restoring liquidity to the capital markets is another important step. Mortgage rate levels should be lowered to enable builders, investors and homeowners to restructure their mortgage loans and stimulate market activity.

The stock market needs to regain stability and credibility. Millions of individuals and families who have lost the billions that they have entrusted to the stock market need to believe again in the viability of the stock market as an investment facility.

Based on Moody’s web site economy.com, an estimated 1.9 million American households will be forced out of their foreclosed houses in 2009. It is these people that must be helped through various mortgage restructuring strategies in order to prevent a disastrous situation of struggling Americans in the midst of foreclosure properties.

Lastly, the U.S. housing market needs to be jump-started. According to economists and financial analysts, a resurgence of the housing market will signify a revitalization of consumer confidence and will spark the start of economic recovery.

Surely, most Americans will give the incoming President a lot of goodwill to inspire him to lead the country out of the economic downturn.

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• Builders Shrink Homes as Prices of Foreclosed New Homes Fall