The foreclosure crisis is the result of too many unqualified people getting loans, the result being more money was lent out than what is going to be paid back. This was due to the lifting of restrictions on the mortgage industry to further social engineering. We need to return to sound lending practices as we had in the past (and as practiced in Canada). One of the greatest factors that contributed to the housing crisis was stated-income-loans. A “stated income loan” is a loan given out to a person of an income that is not documented but verbally claimed. This loaning system is poorly contrived, and should be the first thing to be removed. However, the damage of this system has already been done. Much of this reform is already underway. But that alone won’t fix the existing crisis in the housing market/mortgage industry.
Every family involved in this is different and each circumstance unique. We can, however, split the victims up into groups that have been effected the most. There are four general groups that encompass the mass of those affected. 1) There are the builders who have empty houses and condominium units with their construction loans coming due. 2) There are home owners out there who are stuck in a loan without the option of refinancing, due to the decline in the value of their homes. 3) There are people out there who have found that the value of their homes have dropped so much that they have no incentive to stay. And 4) There are the people who simply can’t afford their current house; this could be because they lost their job, or because they were not honest about their income from the beginning. These groups encompass a majority of the victims and each needs to be treated separately to ease the burd...
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... immediate solution, but that they’re putting a burden on the housing market.
Some borrowers will have to be foreclosed upon. However, efforts should be to made to encourage them to take advantage of the above programs. Our hope is to minimize the ongoing damage and to allow the housing market and the mortgage industry to eventually grow out of the crisis. We do this by limiting the burden from the other groups long enough for the housing market/mortgage industry to recover. There isn’t a single solution to make this housing crisis better, and whatever method is applied will take time. It’s important in trying to fix this that we bear in mind these are people, and we’re talking about their homes. The housing crisis we’re facing today is a product of bad policies and lack of foresight, it would be a mistake to try and solve our problem with the same mindset.
The last quarter twelve percent (12%) of American homes are in default of their loan, or in foreclosure. Add that to the previous four quarters and that is eight point seven (8.7) million homes in crisis. (Further on known as HIC's) The United States “Bail Out” helped major mortgage corporations, and their chief executive officers (CEO's), but not the families that are in, or were in these HIC's across America.
In essence, the problem leading to the foreclosure crisis is the recent decrease in people’s ability to make their loan payments due to job loss and lower wages brought on by the economy’s weak state. Rather than throw billions of dollars at big banks in the hope that they find ways to help the homeowners’ loans, the government should attack the problem through the individual. Simply, the government aid being spent in the hopes of stimulating the economy should be funneled toward reducing the balance of home loans to make the monthly payments affordable for the owner. By funneling the government aid directly to the American home owner in need, the economy would greatly benefit as homeowners regain their footing with their budget because the economy and foreclosure are directly related. When one hurts, so does the other; when one prospers, the other does as we...
...just as welfare helped people during the great depression, this new plan could help people during this extreme recession. It is so important to keep people in their homes and not on the street and with help from our government and each individual taking responsibility for their actions, the amount of people facing foreclosure can decrease. Every American wants to know that they have a place to go home to and to call their own. For many people placing their homes up for foreclosure was something they never thought would happen and it is easy to say what one would have done to prevent this. As American we must stop blaming and looking at what has happened to the housing market and start planning on ways to fix this situation. Our country should take the resources we have now in the present, and create a plane to insure that every person is taken care of in the future.
The foreclosure crisis has been devastating. Families no longer able to afford mortgage payments are forced into bankruptcy, while banks find themselves with properties valued at less than the loan principal. Solutions proposed thus far have primarily focused on loan re-modification measures that only slightly relieve the financial burden for homeowners and frustrate lenders who are forced into less attractive loan terms. However, one solution not being discussed in congress may resolve the housing market slump while benefiting families and investors alike.
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.
As of December 29, 2009, the website Foreclosure.com reported that over 2.2 million homes in the continental USA are in some form of foreclosure, 486,323 are in pre-foreclosure and 465,490 have already been foreclosed. Over seven hundred thousand have tax liens against them and 87, 389 have been sold in Sheriff sales. Along with the homeowners, mortgage companies and banks have suffered tremendous financial loss. However, the homeowners lost so much more; they not only lost the roof over their heads, but memories, their self-esteem and their piece of the American dream.
It’s important to note that the solutions made above should be on a person-to-person basis and do not apply to everyone. Yet, if possible, it is to the best interest of all parties to see that these solutions are implemented. For in every city, in every neighborhood, and on every street, there is someone facing foreclosure. If not for the empathy of another’s pain, then look at it in terms of how it’s hurting you. If you’re a neighbor, you’re left with an unsafe, empty neighborhood and a house that’s worth considerably less because of it. If you’re a bank, you’re left owning a house with unpaid mortgages and annual property taxes. If you’re an investor, you see your shares decreasing in value which takes money out of your own pocket. The foreclosure crisis affects everyone, and it’s about time that we realize that.
... main way to fix the foreclosure crisis; education. A concentration on education doesn't mean spend more tax dollars on public schools. I mean increase the quality and target of the curriculum in the schools that do exist. Americans learn of Paul Revere but do they know about Louis McFadden. We learn about capitalism and democracy but do we know how it is sustained. Do we teach and require from ourselves and our children the common sacrifice needed to maintain our way of life. Do we know and understand our rights, not in some superficial manner but in a substantial internalizing way. I think if we did, we would be greater demanders and defenders of such. Property, due process, legal vocational pursuits, and contract rights are such that if not protected, will not only foster more and deeper foreclosure and financial crises, but could end our democracy as we know it.