For the past several months, the Obama administration has tried to enact programs which would keep Americans in their homes. Now, they are trying to solve the foreclosure crisis by going in the exact opposite direction. They are now paying homeowners to leave.
Short sales are when a home is sold for below market value. What the Obama administration is doing now is encouraging short sales and paying homeowners a little bit of spending money in the process. The question is, if the Obama administration has been working for months to keep homeowners in their homes through their previous plans, why would they want to get homeowners out now? The answer to that question is simple. Many of those homeowners helped by the old Obama programs ended up in foreclosure anyway. The Obama administration wants to minimize the amount of foreclosures, because they are afraid that the fragile, recovering economy won’t be able to take it.
It is a good sign that the Obama administration is taking these new measures to try and solve the problem, because it is a sign that they realize the mistakes that came with their old programs, and that they were not too proud to admit their mistakes. Hopefully, this new program will work. It will certainly not yield more foreclosures than their previous program, so we can only hope that this new program will speed the road to recovery.