In order to properly formulate a solution to the current foreclosure crisis, one must examine the initializing factors, the specific preconditions that are largely responsible in the causation of the crisis. The entire financial crisis was ignited as a result of "illiquid assets on financial institutions of the United States... on their balance sheet."(Former Sect. of Treasury J.Paulson. Sept, 19 2008). These assets were largely comprised of securities backed by mortgage risk, many of which were backed by "subprime" mortgages. With these securities literally worthless, the enormous amounts of debt were to be realized. The acquisition of these securities that provided the preconditions for such a crisis, showcases irresponsibility on all fronts; the regulators, primary financial institutions, and the individuals taking mortgages of which they have little hope of repaying, all share the blame and therefore the natural punishment incurred as the repercussions are realized.
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...e American economic structure possesses, solving such a crisis does not require excessive exterior intervention. America remains as the grassroots of financial innovation. The American economy is always a step ahead of its peers; the economic crisis started in the United States, but this subtle fact is crucial in retaining American financial innovative superiority. Given this incredible affinity for self correction, the only feasible means for accelerating the recovery has been through the injection of liquidity into the market. Half of the solution, when to initiate this action, has already been completed, but the other half, when to remove the stimulus, has only recently taken the stage. America is well on its way to regaining economic prosperity, but one must remember this crisis as a reminder of the importance of preventative regulatory discipline.
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