History of Foreclosure

In order to accurately solve the problem of the foreclosure crisis the nation is currently in, one must look at the cause of the issue. To determine the cause, the history of foreclosures has to be looked at. The questions, “How long have foreclosures been around? In the past what was the cause of foreclosures? How was the problem fixed before? What are the similarities between now and then?” all need to be answered.

Foreclosures have been around since the first public banking system was brought into effect in February 1791 (Cowen). The development of the stock market came around on July 4, 1791. The first bank panic was in 1792, when banks had to recall many of the loans they had given, forcing speculators to sell their stock; this caused the first U.S. securities market crash. When people were not able to pay for their homes and businesses banks were forced to foreclose. By foreclosing on a house or business, the bank could resell it, getting the money it should have been receiving, keeping the bank from faulting on a payment owed to the Federal Government.

A similar thing happened throughout the latter part of the 19th century, after the Homestead Act of 1862 was passed. The Homestead Act gave settlers as much as 160 acres of land for living on it for five years, as well as improving it, while paying a nominal fee averaging about thirty dollars, but in some cases as low as ten dollars. Residency was required for ownership on the land. It was later found that 160 acres was not enough in the plains, though it was on the eastern coast (Freligh).

As the farmers had trouble with insects, droughts, and problems with erosion, they had to take high interest loans from the bank, and when they faulted, the farmers left the banks with ...

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...ort the working class of the nation.

The only option is to get the jobs back. Having major manufacturing in the United State once more will give more people the opportunity to work, feeding the unavoidable supply and demand money cycle. The more jobs there are, the more revenue the government makes, and the more money that goes through the economy.

Knowing the past history of banking issues and foreclosures, along with what has and hasn’t worked in the past is the only way to find an answer to the current foreclosure problem at hand. In the past finding and or making jobs for the unemployed helped revive the national economy, and lessened the number of foreclosures, because people could pay small increments to the banks. Fixing the job market by finding more jobs is the only way to truly get the nation back on its feet and fix the current foreclosure problem.