The foreclosure crisis has reached new heights since the all-time high deficit in the economy. U.S. foreclosure rates went up more than 81% and 861,664 families lost their homes to foreclosure in 2008 (Les Christie). Also, 54 households received a foreclosure notice last year (Les Christie). So what is the solution?
Bold action is needed to address this serious issue. I suggest a “real estate pause” for a temporary amount of time, similar to what Roosevelt did with the “bank holiday” during the Great Depression. The root of the foreclosure problem is that people who should be living in homes valued at $200,000 or lower are living in over $500,000 homes with “house poor” mortgages. Many Americans like to live above their means and now the real estate market and all Americans are paying the price. The result is that many have to accept bankruptcy or short sales. My “real estate pause” idea is to close all interactions between the banks and new homeowners that are seeking to buy above their means. I understand that we cannot shut down all the real estate offices in the country, but the goal is to eliminate the loans that made the foreclosures a reality. My “real estate pause” solution consists of three principles. First, banks need to stop financing home buyers for more than they can afford. Sellers need to be aware of their buyers so that the home does not go onto the foreclosure list. Second, banks must only approve mortgages for homes that have been correctly and fairly priced to preserve home values. Many Americans right now are selling their homes for a depreciated price so that they can get out before they start losing even more money. Until buyers start buying the houses at the correct value, the mark...
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.... The cycle needs to stop now before Americans start losing hope in the real estate market for good.
The foreclosure crisis will not end easily, and it is up to all Americans to do their part to prevent another crisis. The problem is linked to cultural values that equal success to possessions. We are not satisfied unless our homes and cars are better than those of our neighbors. This idea of wealth and the value on material possessions instead of family and a job got all of us into the problem. Now everyone needs to do their part to stop it again. Ideally, the current foreclosure crisis that has affected all Americans could result in a cultural shift to value family security and fair business practices over possessions and net worth. I believe that this plan would help to stop the foreclosure crisis and possibly prevent one in the future.
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market. People were buying house way out of their range because of low interest rates, the banks seemingly easily giving out massive loans and banks betting against the housing market. There were
There is, I believe, no easy way to solve 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.
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.
To solve the foreclosure crisis we must take a multi-pronged approach that tackles the issues making the situation worse and that caused the problems in the first place. Our goal is to do this in an efficient and time conscious manner. Any solution is going to have its positive and negative aspects but we must try to maximize the former and minimize the latter.
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens.
...tions may not immediately and completely end our current foreclosure problem. Hopefully, it will be the beginning of a solution to the on-going problem of borrowing money, attacking the core of where I think the problem really lies. Americans have always been known for their resiliency. If only patience can be developed as well in this time of economic crisis that could very well lead to a long term solution. By acquiring property that is paid off, they will be able to relieve themselves from future pains. Because most Americans cannot help the economic state, they can help themselves by preparing for the future and whatever it may bring.
There is a solution to the Foreclosure Crisis. I do not propose that this is my own answer, but that it is born out of Love. The love for all my family and friends and the country as a whole is the reason for this proposal. Their fates and indeed the fates of our way of life in America depend on what we do at this time in history. The admiration and love for the foundation on which this country was established is an additional motivating factor. Needless to say we can neither turn our backs on all those who have shed blood and even given their very lives for the principles of our America. To allow this jewel of freedom and prosperity to falter and deteriorate would be the most monumental political plunder ever recorded. We can not afford to blow this opportunity.
All good things must come to and end. In late 2005, the housing bubble burst, and housing began to decline in price. People who refinanced, particularly those who financed with variable interest rates suddenly found their homes were valued at much less. The housing market became flooded with homes for sale, because the homeowners with variable rates and interest only loans could not continue to make their payments. (Greenspan) The rise in the number of homes for sale caused further lowering of home values.
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.
Not since the Great Depression of 1929 has America experienced such economic chaos, job and housing loss. Perhaps housing loss was not as wide-spread then since there were fewer homeowners. The government supposedly put in measures designed not to let those on Wall Street cause the same thing to happen again. Yet, here we are some eighty years later in the same situation. It seems that history keeps repeating itself. The question is why? The answer is greed. Unfortunately, the question "how can we stop it from happening again"? cannot be answered in one definitive statement. Of course the solution to preventing home foreclosures is "prevention," which in itself comes with a lot of variables.
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.
Unfortunately, much more needs to be done in order to see the light on the other side. First off, the United States economy, in general, needs to improve. The economy is having a domino effect, and now it is hitting the housing industry. Our unemployment rate is up to 10%. Banks are not prospering like in the past.
... 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.
Estevão, M. and N. Barrera, 2008, ―House Prices and Regional Cycles in the United States,‖ United States: Selected Issues, IMF Country Report No. 08/256, Washington, DC: International Monetary Fund.
housing market is not what it was, but it is recovering. Mortgage rates are dropping quickly, and this pattern could have a positive long term effect. The typical American takes a 30-year mortgage on a home. According to Freddie Mac, a mortgage loan company, the average rate for a thirty-year mortgage has dropped from 4.02% to 3.93% in just three months. While this may not seem significant, a continuation of this pattern will have a dramatic effect over time (La Monica). While it is important for the housing market to have prices that are consistently rising, it is not necessarily desirable for the prices to return to their previous high. “Just because your housing market hasn’t recovered to its pre-recession peak doesn’t necessarily mean it’s a bad thing.”