Positive Results of the Foreclosure Crisis

At first glance, “positive results of the foreclosure crisis,” sounds like an oxymoron; two mutually exclusive elements. A second look, however, reveals several positive elements, such as a boom in the home rental business, apartment building construction on the upswing, and a lull in private home construction, which has become over-expansive in some areas. Another positive result of this foreclosure cycle is a new look by Congress at lending laws. While we can't change what has already happened, it is possible to take steps to prevent it from happening in the future.

The housing boom–to-bust cycle has been as sure as the phases of the moon since the end of World War II. Every 12 to 15 years, a slowdown in the economy triggers an increase in home foreclosures and home sales. The tax laws make it profitable for large banks to hold on to foreclosed property until the housing market rebounds and they can make double their money. They profit once by deducting the value of the uncollected loan from their taxes, and again when they eventually sell the house.

Another positive result of the foreclosure crisis is perhaps unappreciated but still valuable- first time buyers finding it difficult or impossible to buy over their heads. They have to buy what they can afford rather than stretching beyond their means for a status symbol. This requirement saves marriages, prevents nervous breakdowns and bankruptcies, and preserves peace of mind. So depending on where you fit into the scheme of things, there can be positives to take away from the foreclosure crisis.