Foreclosure Solution

1069 Words5 Pages
FORECLOSURE SOLUTION The US Census Bureau reports that there is an estimated 51 million housing units in America, with a mortgage balance. According to the Mortgage Bankers Association 10% of all mortgages are behind in payments and an additional 5% are in foreclosure. These figures translate to having over 5 million US mortgages behind on the monthly payment obligations and approximately 2.5 million additional properties are already in foreclosure. In a recent report from American Title Company, there is an estimated 10.7 million homes with mortgage balances which are greater than the property value. In some areas of the country, the homeowners’ are as much as 65% upside down. The Mortgage Bankers Association reports that there will be a significant increase in prime-fixed rate mortgage defaults, as the economy struggles with increased number of job losses expected. This does not even address the looming commercial property loans that are delinquent. Although the mortgage crisis seems to have started with the “sub-prime” loans and the loose lending practices, it has had a much deeper impact on the over-all US and world economy. As people lose their jobs or experience a slowdown in business and decrease in their household incomes, it is harder to meet their financial obligations. In addition to the tighter lending restrictions and home values dropping, many homeowners that owe more than their homes are worth, have decided to stop paying the mortgage and walk away because they are unable to sell them. In spite of encouragement from the government to work with homeowner and help restructure their mortgages, this is not being done. In October, 2008, President Obama signed the TARP act. This law was designed to give $700 B... ... middle of paper ... ...tes can slowly be adjusted upward to current market interest rates. This will not fix every loan and stop every foreclosure, but I believe this plan will have a significant positive impact. Yes, there will still be foreclosures and there will always be foreclosures, but at a more normal rate. I believe this plan will make a huge impact on the overall mortgage crisis and stabilize the home values. It will also keep the homeowner, like my parents, who are feeling discouraged, because they owe more than they can sell it for, from walking away from their investment. This will also give the American people confidence and a greater over-all sense of security. With the increase disposable income, money would be put back into the economy. More money from consumers, flowing through the economy would help every aspect of the economy getting back on track. Submitted By:
Open Document