Sunday, January 5, 2020

How to Solve the Foreclosure Crisis Essay - 1250 Words

â€Å"How to Solve the Foreclosure Crisis?† â€Å"How to solve the foreclosure crisis?† This is a very troubling question currently facing our country today. The foreclosure crisis fueled by subprime mortgages, was a ticking time bomb waiting to explode. Many Americans hold large mortgages with adjustable rates that continue to increase. It was only a matter of time before the market would come tumbling down. From 2008 until now the national unemployment rate has risen from 5-6% to about 10.2% (U.S. Bureau of Labor Statistics). With unemployment rates continuing to climb, more and more Americans are stuck in large mortgages with no means to pay them. Many of these debtors are faced with mortgages that are greater than the values of their homes due†¦show more content†¦After the market crashed back in September of 2008 housing prices came crashing down as well. The fair value or market value of these mortgages was well below the purchase price for these homes. This left many debtors stuck with mortgages worth mo re than the value of their homes. Homeowners have no incentive to continue to make large mortgage payments on homes that are valued at less than their current mortgages. This situation has caused many homeowners to default or short-sell their homes in order to get out of these mortgage agreements. In addition, growing unemployment has caused many homeowners with subprime mortgage agreements to default as well. Substantial impairment has resulted throughout the United States due to the decline in market value of homes. In this situation banks and other creditors are faced with suffering a loss no matter what the circumstance. Forcing many homeowners into foreclosure will leave millions homeless. The loss due to the decline in market price of homes will be passed back to the creditors, since homeowners will not have the money to pay back their outstanding mortgages. It is very doubtful that creditors will be able to recover their losses by selling repossessed homes at auction. In my o pinion these creditors and banks best option is to work with American homeowners and offer some sort of debt restructuringShow MoreRelatedHow to Solve the Foreclosure Crisis1218 Words   |  5 PagesHow to Solve the Foreclosure Crisis The foreclosure crisis in our country has implemented a domino effect that may take years before we note any positive changes. As the country begins to heal, an effective process and/or program must be implemented that will reduce or eliminate foreclosures. It is important to remember that purchasing and maintaining a home is a part of the â€Å"American Dream,† and when working class families cannot seem to manage without loss of pride and dignity, then the dreamRead MoreHow to Solve the Foreclosure Crisis1146 Words   |  5 PagesHow to Solve the Foreclosure Crisis An important step in solving the foreclosure crisis is to provide assistance to mortgagees in making the monthly loan payments; this assistance should be in place before the first loan payment is due. One solution in providing assistance, which would not require any additional governmental funds to be spent, would be a mandatory mortgage equity accelerator program for every new loan written. A mortgage equity enhancement program allows a thirty year mortgageRead MoreHow To Solve The Foreclosure Crisis1443 Words   |  6 PagesHOW TO SOLVE THE FORECL0SURE CRISIS 2009 was a record breaking year for foreclosures in the United States. The perfect storm of high unemployment, tightening credit, decreasing real estate values and cataclysmic stock market crash resulted in millions of homeowners defaulting on their mortgages. What are the solutions to this problem? Some would argue that the government should intervene and help homeowners. Those with a more â€Å"free market† or laissez faire approach would contend that the governmentRead MoreHOW TO SOLVE THE FORECLOSURE CRISIS1793 Words   |  8 PagesHOW TO SOLVE THE FORECLOSURE CRISIS What do we think when we hear the word â€Å"foreclosure†? Most people realize that it’s definitely something that is not good, some say that it’s when someone fails to do something, but those people don’t really know the meaning of it. But before I present my idea let’s review the meaning of such process: From the website of foreclosure Definition The legal process by which an owners right to a property is terminated, usually dueRead MoreHow to Solve the Foreclosure Crisis2207 Words   |  9 PagesThe foreclosure crisis has become as confounding as the old, neglected house on the corner of your street. With shattered windows and wild lawn, no one knows what to do with it, how to save it or even get rid of it. Public and private institutions have tried this and that to patch the ongoing economic blight: lowered interest rates, credit counseling, foreclosure workshops, short sales and bailouts. Nevertheless, the number of foreclosures has relentlessly continued its climb. This ascent hasRead MoreHow to Solve the Foreclosure Crisis977 Words   |  4 PagesThe economic crisis that has occurred in the recent years and that has consistently worsened over past year or so has led to many other problems, one of which is the foreclosure crisis. More and more people are losing their homes due to job loss or simply poor financial choices. The number of unemployed and homeless is increasing at an alarming rate. Many feel like there is nothing that can be done to remedy the situation, especially when the enormous debt that the United States has already accumulatedRead MoreHow to Solve the Foreclosure Crisis Essay1297 Words   |  6 PagesHow to Solve the Foreclosure Crisis Imagine a young couple was married and bought a house together. They were happy they made an investment together that they would never regret. A few years later, the company the husband worked for suffered critically by the recession and he was one of the hundreds of people who got their job cut. They now have two babies to feed and have to choose between food and the mortgage. They soon began to miss their monthly payments. They waited until things becameRead MoreHow to Solve the Foreclosure Crisis Essay2252 Words   |  10 Pagesdollars funded by investments and home purchases were lost within a few months ( United States housing bubble). Millions of home owners were found to be unable to pay their mortgages, leading to hundreds of thousands of foreclosures. These foreclosures not only led to the decrease in value of the foreclosed homes, but also decreased the value of the homes in the neighborhoods, complexes and cul-de-sacs around them ( The billion d ollar industry created by the fruitful housingRead MoreHow to Solve the Foreclosure Crisis Essay1086 Words   |  5 PagesThe solution to the Foreclosure Crisis is the implementation of continual, mandatory education classes that must be attended and passed, or penalties will be applied to the homeowners. A little tough love from the lender and the government is necessary. Just as our parents follow through and continue to teach us throughout our lives, so must the lenders and the government take the time to â€Å"sit† every homeowner down to make them learn and realize that being a homeowner comes with big responsibilitiesRead MoreHow to Solve The Foreclosure Crisis Essay1273 Words   |  6 Pageshaving to deal with a major foreclosure crisis. According to studies by the Mortgage Bankers Association, one out of every 200 homes will eventually be foreclosed, and 250,000 families enter into foreclosure every three months. Although the worst times are still in our future, w ith help from the United States government, we as citizens will eventually overcome the horrendous situation of America’s current real estate market. To combat our nation’s foreclosure crisis, I believe it is necessary to

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