It is no secret the foreclosure crisis has played a significant role in the financial meltdown of the past year. The collapse of the housing marketing has brought thousands of families across the country to financial ruin, forcing many out on the streets. Although the common consensus is that something must be done to stabilize the foreclosure crisis, the agreement ends there. Proposed solutions to the foreclosure crisis have drawn controversy from all political affiliations and walks of life. This controversy is largely due to the fact that no one can determine for certain, a single factor that led to the housing market meltdown. By carefully analyzing the factors that potentially caused the foreclosure crisis, one can better determine possible solutions to it.
Perhaps the most recognized cause of the foreclosure is greed on the part of nearly everyone involved in the mortgage and real estate industries. Homes were all too often over valued by appraisers, and then realtors listed them at these outrageous prices. Loans were also offered at higher values by loan officers, so that they could increase their commissions. Homeowners also played a part in their own demise by participating in activities such as lying about income on loan applications in order to qualify for a home that they essentially could not afford. Finally, banks provided sketchy, adjustable rate mortgages to homebuyers based on their ability to pay only the low, “teaser” rate. These factors cumulated, creating an inflated housing market, where many buyers could not actually afford the homes they were sold.
Another cause of this catastrophe lies with the declining value of the dollar, which is decreasing the purchasing power of Americans. As the dollar falls in ...
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...ll as the more direct causes of the housing bust. To begin with, the government must stop printing money at will to correct a deficit. Instead, capital must be created by stimulating the economy.
Possibilities for stimulating the domestic economy are endless, but perhaps the most influential and practical would be by creating alternative forms of energy. This would reduce foreign dependence and many geopolitical concerns, thus increasing the value of the dollar. There is also an infinite number of jobs which could be created because of alternative energy sources.
The foreclosure can be looked at in much the same way that a doctor looks at a patient. The symptoms must first be analyzed in order for a correct diagnosis to be reached. This is critical because it is only when the correct diagnosis is reached that a proper course of treatment can be administered.
the foreclosure crisis. The reason for this is that the underlying problem is not merely the individual foreclosures. The underlying problem isn’t even all of the foreclosures as a whole which constitute the crisis. No, the real underlying problem is ultimately human greed. Consequently, the way to solve the foreclosure crisis, I believe, is not merely through some kind of “stimulus plan.” Yet, this matter shall be examined more thoroughly later. First, the causes of the foreclosure crisis must