The U.S. economy is struggling and the housing market is suffering in a way we haven't seen since the Great Depression. Many homeowners are struggling with their mortgage payments and have fallen into foreclosure as a result. Additionally, real estate prices have fallen and, as a result, the outstanding amount on many mortgages is greater than the value of the home underlying the mortgage. I think the goal of banks and the US government should be to keep people in their homes. If banks continue to foreclose at such an alarming rate, they will end up owning too many homes and, by trying to sell them, will continue to put pressure on the housing market, making it even more difficult for the economy to recover. 'economy. The government should impose a system that aligns the incentives of landlords and banks. Homeowners should be able to continue making payments and keep their homes while the economy improves. The FDIC has released some very sobering statistics on the current state of the housing market in the United States. Every three months, 250,000 new families enter foreclosure, according to the Mortgage Bankers Association. According to a Chicago case study by William Apgar and Mark Duda, foreclosed homes became sites for crime or other neighborhood problems. Each foreclosed home can impose a cost of up to $34,000 on local government agencies due to police and fire cleanup efforts. Costs include: unpaid water, sewage cleaning and removal of waste from homes. According to another study by the same team, a foreclosure can result in a reduction in the value of nearby homes by up to $220,000. This problem started with the banks and therefore should be solved...... middle of paper... ...the principal amount of existing mortgages exceeds the value of the underlying homes. Typically, banks own homes in the same areas, and if one home goes into foreclosure, other homes in that area will be affected by the foreclosure. The bank is only hurting itself by continuing to foreclose. A good life lesson is to step back and look at the bigger picture. If the bank continues to focus on each individual house, it will suffer heavy losses. The economy is currently in trouble and the situation will only get worse if a solution is not found. Banks will create a domino effect if they continue to foreclose on homes. Adjusting existing principal amounts downward in exchange for attractive options on future housing prices seems to be the best solution. This would align the incentives of banks and landlords and keep the supply of housing on the market under control...