The mortgage crisis has deeply touched the psyche of the American people and affected individuals and families from every socio-economic level. The solutions will require sacrifices from all segments of society. Individuals must learn to live within their means, banks and companies may have to forego some profits and focus on long term training and sustainment of the workforce, and the government is shouldering more of the risk through tax incentives and guarantees. These measures are essential elements of a long lasting solution and ensure the viability of a system that supports the American Dream of homeownership and prosperity.
Households from all over the United States are currently experiencing massive wealth destruction. Even after the housing crash that led to the financial crisis and the eventual bailout of the financial institutions, individual families are still seeing their homes being foreclosed and their life savings diminishing to nothing. The government assistance programs that have been implemented so far have only helped the institutions that created this crisis and the families who are hurting the most have yet to receive any significant assistance.
The foreclosure crisis in our country is a problem that is affecting many Americans today. This calamity has also had a negative impact on our overall economy. The federal government can make steps that would help solve this crisis that would benefit homeowners, potential homeowners, financial institutions and all people that have been indirectly affected by this issue.
As mortgage companies began to realize the profits from these unlikely sources, they developed more and more programs that catered to even more consumers; “exotic” they were called and playing onto the client’s current cash flow by introducing low “teaser” rates and equally low payments. Loan officers dismissed client’s concerns by saying that the average home is refinanced every 5 years, anyway, so, the customer could simply refinance when the rate/payment became too high to bear. Coincidentally, using this type of formula, the customer now qualified for a home that was well outside of their means! Customers, dazzled by the higher-end home, were signing on the proverbial dotted line with no thought of the future.
Music is the true meter of thought among the American people. Music lyrics are poems which encapsulate a message to the American people. One of these great songs, John Dickenson’s “Liberty Song”, reminds the American people of a concept that has recently eluded them: “United we stand, but divided we fall”. This concept has been ingrained into our society and is reflected through our every day actions. Starting when consumers began to lose confidence in the stock market and Bear Stearns required a federal bailout, the American people decided to separate instead of standing united. Since then the United States has plunged into an economic recession. The United States has suffered both the foreseen effects of a recession and several unforeseen effects, including a foreclosure problem of great magnitude. Coupled with unemployment and drops in the stock market, the United States has seen a rapidly increasing foreclosure rate, and the problem has only continued to escalate. This raises the question: how do we solve the foreclosure crisis?
Every three months 250,000 families enter into foreclosure. “One child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage.” (Market Wire)These facts are not only shocking and true but are continuing to grow. It might be time for the government to step in and help the homeowners of America. In an effort to solve the foreclosure dilemma we need to look at the problem then try to fix it. We can’t fix all problems that cause foreclosure but let’s look at how we can help to decrease the ever rising foreclosure statistics. I see negative equity in homes as being a large part of the foreclosure problem. There is a way to focus on helping people keep their homes. Help can be given to the people who can not sell their home or can not afford it any more because they owe more than the home’s value.
In the early part of the twenty-first century Americans have been able to get loans for houses that at times seem to be at best risky. For some Americans this was the only option they had in order to complete their American Dream of owning their own home. However for many of these same people and many others the economy went into a downward spiral and many foreclosures have been put in front of many Americans.
Leading up to the crisis of the housing market, borrowers got mortgages without understanding the terms. Banks were giving out loans to people the banks weren't sure could pay the money back. The closer to the crisis, the higher the frequency of illegitimate loans and mortgages. Because there were so many mortgages on houses that could not be paid back, millions of mortgages were foreclosed on, and the houses we...
The home mortgage loan industry which is located in the United States is a business that was one of the causes of the major financial crisis that occurred in the 2008 and lasted for about a year (Kai Wright, 2009). In this time period, the average loss on a foreclosure was about $130,000. These statistics show how bad it got in this mortgage crisis era triggered by the number of foreclosures. This all could have been prevented if homeowners were able to meet their commitment of payments in its due
Many Americans want to have the best and be the best, no matter the cost. Many people have bought homes that are way too expensive for them. They think they can make the payments, they think everything will work out, but it won’t. A big reason for this “belief” is that these people buying these big, luxurious, over-the-top houses is the bank workers who allow million dollar loans to be made. Banks are largely to blame for this problem. There needs to be a major bank reorganization to begin fixing this crisis. If a person doesn’t have enough money to make the mortgage payments, then they should not be approved for a loan. Most people who are looking to buy a home “have no savings, no available credit”(fdic.gov). The bank needs to better manage the loans they are giving out and the people they are giving these enormous loans to. People might be mad that they don’t get approved for their loans, but they should be advised by the bank to ma...