My Proposed Solution to the Foreclosure Problem in America

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I remember when I prepared to buy my first home in 1997, people said it would be a laborious process. To this day, I cannot figure out what people were referring to as laborious. The mortgage officer provides the list of all documents that need to be submitted. I submitted the documents in 1997. If there were questions, I answered them. If there were glitches, I took care of them expediently. During my closing, figures drastically changed from what was on the original good faith estimate. I interrupted the closing to ask for an explanation. No explanation could be provided. All stakeholders in the room were looking at one another. I announced verbally that no person sitting in the room would get paid if my closing figures didn’t reflect the good faith estimate. Somehow the stakeholders in the room restated my figures back to what was provided on the good faith estimate and I moved into my first new home. My loan was approved and the home buying experience was simple.

Below, I am proposing a solution that involves accountability and responsibility from all three stakeholders involved in the mortgage process.

Proposed solution: Consumer perspective

a) Whether it’s the purchase of a first home or the 20th home, each loan applicant should be required to explain their home loan either verbally or in written form to a third [regulatory] party. The third party will have the final loan documents in hand and will simply ask a series of questions and receive the answers to assure the applicant explicitly understands what they are engaging in.

b) I understand, as the consumer, we are required to provide a lot of personal information. However, I learned a simple principle buying my first home – don’t allow the relationship with...

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...e jailed. The federal government will define and legislate predatory lending, predatory loans and predatory institutions. Additionally, all assets these predatory and unscrupulous lenders own, should be liquidated and applied against the current, outstanding mortgage payments.

d) The lending institutions who are choosing to stifle the current foreclosure modification process, should be fined $1 million per quarter. Lending institutions process paper work continuously. It is unacceptable that the paperwork for loan modifications cannot seem to be completed. Since these institutions have received federal bailout money, they should be required to have “x” number of new loans that are modified per quarter. For each quarter this metric is not achieved, a $1 million fine is paid to the government and 10% of the bailout funds are to be returned immediately.

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