Idea of dealing with foreclosed houses. Let them be raffled off!

[AndyHammond1970]

There are several charity auctions of houses that I read about each year.
What if the government would allow banks that hold foreclosed property to apply for permission to be able to raffle a house for the value owed on it.A house that has a $250,000 principle oustanding could be set up offering 10000 tickets at $25.00 each. It should be rather easy to get many people who couldn't buy the house for sale at that kind of price to buy a ticket or two. I have no doubt that some people with more money than the average worker has would buy many tickets. This would allow the bank to recover the money for the house and someone to win the house. You might have to create a caveat that the house could not be sold or refinanced for some period of time like maybe five years. I know this is probably a crazy idea but it seems like it could work to help get some houses sold that there is just no standard market for in this current economic crisis.

[ixion]

1. how about offering them back to those who bought the house in the first place

I mean, since you're going to give them away, why not give them to someone who could use it.

[tyne]

2. Actually....

that's not a bad idea.

[tjwash]

3. How about them changing their predatory mortgages to affordable ones?

Lock the folks in for 30 years at an interest rate they can actually afford?

[Heidi]

4. Is that what you want done if you lose _your_ home? Think carefully before answering. (nt)

[1776Forever]

5. At least you are trying to be creative - I also had an idea - Trade down ???? What do you think?

Here is how it would work. Someone with a home that is too much for them to handle would trade for a lower priced home. This would give the people involved a chance to have a home that they can afford and help the foreclosure rates go down. Of course this may give someone a chance to get a "better" or larger home but that would have to be agreed by the banks involved. If the trader of the lesser home can show they can make the payments of the bigger one then why not do this?

Just trying like you to be creative. I lost my home because we had an illness in our family and I nor my husband could not find a full time job in Florida. The taxes and insurance is what tipped the balance for us and also the fact that our bank (CitiBank) wouldn't even discuss any payment options. :shrug:

[PSPS]

6. There's a hitch in your idea

The "winner" would have to pay (and rightfully so) income tax on the fair market value of the house minus the amount spend on the ticket(s). If the house is really worth $250K, that would mean a tax due of $62K in the 25% tax bracket. State income tax would be extra.

On the other hand, if the house were really worth less than the amount due, the difference would be taxable to the original owner as gift income.