The settlement deal has been finalized. But experts feel that unless Fannie Mae and Freddie Mac also follow suit and reduce principals there will be no noticeable improvement. FHA, their regulator has already spoken out against this. The amount set aside for principal reduction is said to be just peanuts considering the volume of the problem.

The foreclosure crisis has been analyzed from the financial angle and accordingly financial solutions are being made but the urban designing part of it has been sorely neglected. Increased number of immigrants sought to reside in the suburbs but the developers had built single-family units. This led to many families squeezing into one house, inevitably causing socio-economic tensions.

One of the solutions to the foreclosure crisis is to re-design suburbs so that the houses are made to meet the needs of the people. It means altering single family units and recycling materials from old houses and factories. The problem of toxicity can be solved by planting certain types of trees. All this will require change in present rules.

Even before the 9th February Settlement with the banks has been formalized, many states are thinking of using the money to bridge deficit gaps for purposes not even remotely connected with the housing crisis. It is reminiscent of the tobacco settlement when the money was not spent on shoring up public health pertaining to smoking.

As per the laws of Georgia State, the legislators have the authority to decide how the settlement money would be used. The attorney general of the state has asked them to use it for measures to mitigate the problems related to the foreclosure crisis.

The government wanting to help the underwater mortgages will be unfair towards those who are current on their mortgages but whose property value has tumbled. The investor and pension funds will also lose. Ultimately one who holds on to the mortgage last will be the loser.

The Federal Reserve has sent without prompting a note to various financial committees of the Congress warning of imminent danger ahead. Three other top officials of the Fed have echoed the same view. The government’s covering up of inept handling of operations by zombie bank has led to the continuation of the crisis; the middle class is worst affected.

There are many factors explaining why foreclosures take place and where it happens. Race is one of the important factors apart from crime, income levels, employment picture, value of property etc. But research has shown that the White investors played an important part in concentration of foreclosures in Black neighbourhoods.