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How to Solve the Foreclosure Crisis: The Government Home Loan Option

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How to Solve the Foreclosure Crisis:

The Government Home Loan Option

The foreclosure crisis was not an occurrence that could have been foreseen by most. During 2007 and 2008, gas prices were soaring at their highest since the late 1980’s, averaging around $3.50-$4.00 per gallon across the nation. The increase in gas prices caused many lower class and middle class citizens and families to suffer significantly. This led to a heavy decrease in frivolous spending in most regions, causing a domino effect of various businesses cutting employment and wages, following with a sharper decrease in economic spending, and the delay of the construction industry which resulted in the slowdown of the timber business. With the rapid retard of these industries, the unemployment rate developed into a full grown national crisis to finally result in individuals lacking the ability to pay their bills and primarily defaulting on their monthly mortgages (which led to the meltdown of the financial & banking industry). The mass media and general public associated most of the responsibility of the financial meltdown of the banking industry with the predatory lenders, whom allowed couples and individuals to purchase homes and properties they knowingly could not afford. These purchases were tolerated simply if these people were to agree to an adjustable mortgage rate.

The financial crisis facing the banking industry was a direct result of hiking interest rates by banks on adjustable mortgages. These rates increased due to many of the banks experiencing the effects of the growing economic delay, which principally led to the forfeit of many monthly home payments. Without the revenue of the millions borrowed returning to the lenders, the banks tacked on ...

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...riod to recover from an unexpected incident, such as losing a job. If the government wishes to increase economic spending, then the Government Home Loan Option can be offered to the general public, Public Home Loan Option, with a slightly higher fixed interest rate than that of the foreclosure victims and thirty to forty years to pay off the mortgage. This will result in an increase in home and property sales, causing an increase of the number employed in the construction industry and timber industry.

With the Government Home Loan Option, the government will be able to re-attain their money with interest, tax payers are not footing at the expense of American greed, and the government will invest in a calculated business proposal instead of simply loaning out tax payer’s money to corrupt businesses. I believe this method could also be used for any other situation.
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