Listen, I know it is ridiculous for someone who has a job, and in fact, a decent job like mine, to ever be depressed, but I feel so sad for the people out of work and so incapable of helping them. They are losing their homes, their health insurance and their hope. However, I did read one really interesting idea in the July/August issue of the Atlantic Monthly, which offers a bunch of ideas about how help fix things, including our broken economy.
One idea, from Felix Salmon, a finance blogger for Reuters, seems very appealing.
Whenever a bank forecloses on a home, the current occupants can remain in the property indefinitely as long as they pay fair market rent -- which might be do-able.
You might say, how are they going to pay the rent if they can't pay the mortgage? Good point and it's not going to work in every case. I know from covering this stuff in the past that sometimes people manage to make regular payments, but they still owe for past months. Or they catch themselves up, but still can't get out of foreclosure because of fees and penalties. Whether that's fair is a different issue. Certainly lenders deserve to receive mortgage payments. But in the meantime, Salmon's idea makes sense. An occupied house is less likely to be trashed, a benefit for the house and the neighborhood, which of course impacts housing values. Housing prices can stay stable, because there isn't a rush to sell at a low price just to rescue the asset.
These are all the economic benefits -- the ones that don't take into consideration how such a policy would stabilize families and help avoid homelessness. In an ideal world, a family could, as their situation improves, enter into a program to regain ownership of their home.
Maybe there's a downside to this that I'm not seeing, because, obviously, I'm a reporter and not a banker. Salmon says this could be done with a simple government policy change. I think it's a good idea.