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american dream of home ownership
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How 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 became unbearable to negotiate the loan or an extension to repay the bank but their efforts failed. Another family had a home, they had an adjustable rate mortgage, the two year introductory rate is almost expired and the payments are nearly impossible for the family to pay. The family tried to get out by selling the home but the balance is now worth more than the home and with no other options in sight, the foreclosure sign hung in front of her home.
These stories are now common in America. Many Americans face a huge crisis that they never expected. Many put the blame on the banks while others put it on the borrowers because they should have “done their homework” and research in detail the loan they were about to commit to. However based on extensive research, I concluded that there are several things that contributed to this foreclosure process, thus making several ways to resolve this growing problem.
In order to fix the problem, it’s imperative to know what caused the crisis, not only to prevent it from happening again but also to use the most effective way or ways to address the problem at hand so that it will help the home owner in the end.
There are five reoccurring reason of foreclosure (shown left). The most prominent reason of f...
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...to the bank.
The government should also make a law that if someone wants to buy a home they need at least a five percent down payment. That way the balance will not be high, thus the monthly payments will be lower and more affordable to all Americans.
However this program would be very effective if those who are at risk seek help before they start missing payments. The banks will be more willing to work with these people if they did not ruin their credit score before trying to negotiate. In addition, it will make the job easier for those who worked in the program and quickly solve the issue before it is too late.
Resources
http://money.cnn.com/2008/03/03/real_estate/Hope_Now_helps_million/index.htm
http://moneycentral.msn.com/content/Banking/Homefinancing/P148861.asp
http://online.wsj.com/article/SB124657539489189043.html
My mother
"How to solve the foreclosure crisis." BATTEN 1 Unemployment, it is all too common of a label in this day and age for the American society. In Joshua Cooper Ramo’s article, “Unemployment Nation,” he clearly states: “the government can’t hire everyone” and that there is a decrease in jobs nationally. Ramo’s article was published in the Spetember 21, 2009 TIME magazine and includes many personal tragedies that happened to real Americans who have lost their jobs and are unsuccessful in finding
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downturns. As a result, many of us have lost our jobs and subsequently, our homes. The current foreclosure crisis is affecting 1 out of every 5 Americans, Jonathan Lain (How to Solve the Foreclosure Crisis). So now the focus is on finding ways to solve the growing epidemic of foreclosures. I propose that the government fund a non-profit organization, whose mission is to reduce the number of foreclosures among the American people. Furthermore, although the initial funding would come from the government
Figuring out how much you can afford, learning your rights, shopping for loans, these are a few steps in the home buying process that when learned correctly, can produce a successful homeowner. Learning how to take care of something as special as a home takes time and effort from all those who are present in the home. As the country deals with the economy and the war, the last thing America needs is more homeless people and the rise of the crime rate. Two ideas I have come up with to help solve the foreclosure
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The frequency of foreclosure in our nation today is dangerously high. The strain from the recent economic downturn has put many families and individuals in a financial chokehold preventing them from being able to make their monthly mortgage payments. Consequently, many of these people feel they’ve punched a one-way ticket to foreclosure. With all these homes being foreclosed on, we face a very real crisis. The best way to solve this foreclosure crisis is preventing homes from foreclosing one house
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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
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The problem to be investigated is the ethics and effects of subprime loans on the financial institutions, borrowers and stakeholders. The subprime market was created to provide borrowers with a FICO score below 570 access to home loans. Inopportunely these loans were a major financial risk as most of the borrowers did not have the long-term income to pay for the high interest rate loans. (Jennings, 2012) Subprime loans started out as a generous, philanthropic idea. Giving people who had bad credit