It’s hard when a home becomes a house: left with walls, stripped of memories. It’s disheartening when a family becomes a number: left with foreclosure, stripped of dignity. In 2007, over-extended borrowers began to default on their sub-prime mortgages; mortgages that increased as more and more families chased the American dream during the housing boom. The interest rates were “teasingly” low, but more detrimentally, they were variable. When mortgage rates were readjusted, homeowners found that they could no longer pay the upped monthly payments. Such sucked them in to the dizzying downward spin of heightened debt and negative equity. Such sucked them into the foreclosure crisis.
Yet on the other side of the spectrum are the bankers, those who must then face the ramifications of the underwater loans. What do they do about the payments that now come in both late and sporadically, at best? Should the loans be extended to these unreliable borrowers? What of their obligations to the investors and depositors who have trusted them with their life-savings? When all’s said and done, they too, are left paying for sub-prime mortgages. They, too, are hurt by the foreclosure crisis.
Such countering predicaments were outlined above to show the many layers, the many complexities of which we must take into account. Yet in retrospect, it is important to note that both, understandably, lack very much the concept of “trust”. With so much at stake, any solution met must rectify this for both parties.
My first solution to the foreclosure crisis is a modest spin on the standard participation mortgage. The first step taken is crucial to the solution: the bank must refinance the loan. Simplistic, no? Such is already something we’ve considered, w...
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... they need to get back on their feet.
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.
“Trust takes years to build, seconds to break, and forever to repair. - Anonymous”. If you have ever felt isolated from society, or feel that you are constantly begging for the mercy of your own subconscious, then you know the pain accompanied by expending trust. It is imperative for humanity to cultivate trust; if we lose it, we will simply degenerate into insanity. For instance, in the texts “On the Sidewalk Bleeding”, “The Tell-Tale Heart” as well as “The Landlady”, characters were tasked with uncovering the role that trust plays in conquering challenges. In doing so, they also suffered through fluctuating degrees of tailored hardships.
Sase, J. F., and Gerard Senick. Another Mortgage Tsunami? “Let Them Eat Cake” (Part Two). 2010. Print.
...eting will be a win-win for each party as well as a solution may not be achieved at all. But having the power to walk away and not have the feeling of failure will empower me as I go down this path.
The Sub-Prime Mortgage Crisis of 2008 has been the largest financial crisis to take place since the end of the Great Depression. It was the actions of individuals and companies that caused this crisis. For although it could have been adverted, too much money was being made by too many people in place of authority to think deeply on the situation. As such, by the time actions were taken to attempt to rectify the situation, it was already too late. Trillions of dollar of tax payers’ money was spent trying to repair the situation that was caused by the breakdown of ethics and accountability in the private sector. And despite the government’s actions to attempt to contain the crisis, hundreds of thousands lives were negatively affected before, during, and after this crisis.
trusted, and most importantly, will stop at nothing to solve all the conflicts that are currently
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...
In the early 2000’s the housing market boomed, real estate was a hot investment and everyone was looking to buy a home. However not everyone can afford a home and a majority of people were forced to take out a mortgage to purchase real estate. During the housing boom banks were supplying subprime loans and upping the risk in the real estate market. These loans were not only risky but irresponsible on the part of the banks’ lending them, and although individuals receiving the loans thought they were being helped at the time, these loans were a major reason why so many people their homes, almost crippling toe U.S economy as a whole.
To start my answer related to trust, I would like to start with few quotes that shows the power of trust like, “without trust we don’t truly collaborate, we merely coordinate or at bets cooperate. It is trust that transforms a group of people into a team “- Stephen M.R Covey
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.
“One out of every two hundred homes will be foreclosed every month, making 205,000 new families enter into foreclosure,” Mortgage Bankers Association. The housing industry in the United States is undergoing an unfortunate crisis. There are way too many homes being foreclosed, which cause a ripple of problems.
Affordable housing in the United States describes sheltering units with well-adjusted housing costs for those living on an average, median income. The phrase usually implies to applied rental or purchaser housing within the financial means of lower-income ranges specific to the demographics of any given area. However, affordable housing does not include those living in social housing owned by government and non-profit organizations. More specifically, the targeted range for housing affordability sets below 30 percent of a household's annual income, including all applicable taxes, utility costs and home owners insurance rates. If the mean income per household breaches the 30 percent mark, then the agreed status becomes labeled as "unaffordable" by most recognizable financial institutions.
of trust can begin to shape. “We have to recognize that there cannot be relationships unless there is
Trust is a pretty big subject to expand on, but now we need to move on to the aspect I
The foundation to a healthy relationship is trust. Without trust a relationship can be toxic and overpowered by constant worrying and fighting. In “Psychological Foundations of Trust,” Jeffry Simpson states, “Trust involves
To gain an appreciation for the significance of honesty and trust, consider what our day-to-day life would be if we couldn’t trust anyone. We purchase a bottle of a hundred folic acid tablets from our drugstore. How many of us bother to count the tablets to ensure that we in fact received a hundred? We drive into a gasoline station and the meter reads that we put ten gallons of gasoline into our fuel tank. When was the last time anyone of us bothered to verify whether in fact we received ten gallons instead of nine and a half? We paid seven dollars for a one-pound package of steak. How many of us bother to verify that it was in fa...