There is at least one potential solution to the foreclosure crisis. Many housing advocates in San Francisco favor a strategy called Stabilizing Urban Neighborhoods, or the SUN model.
The SUN model was first initiated and has drawn positive reviews in Boston, a city with a similar housing market to S.F. Alliance of Californians for Community Empowerment and the San Francisco Housing Development Corporation, two nonprofits that assist foreclosed upon homeowners, have been promoting SUN.
In SUN, nonprofits, investment funds, or private investors buy foreclosed properties and then sell them back to the previous owner for a discounted price– a price much lower than post-refinance mortgage. In essence, the model works like a loan modification.