Solving The Foreclosure Crisis

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With today’s seemingly never upturning economy, there comes’ many problems that affect millions of good American people. From job loss to poverty increase, from overdue loan payments to a hard-working man moving onto the streets. These are all real problems today that all go back to a failing economy, and the result of this collapse is loss or foreclosure of a home. To fix this problem, the government is going to need to come to an agreement on a solution; one that will give these people who lost their homes a place to live and even a source of income. They are going to need the help of private investors and home buyers working together to fix this very serious predicament.

To come up with a sensible solution to this problem first the reason behind the problem must be identified. Why do many people lose their homes to foreclosure? People lose their homes because they cannot pay back loans that they have taken to buy the home in the first place. In the past, to take out a loan, the person receiving the loan had to go through a more rigorous process of evaluation before they could get the loan. More recently however, people applying for a loan have been asked much more general questions about their financial status and very little checking has been done in their back round. Loans were being given out to people who could not pay them back so they could buy a house that they could not afford to live in. Loans were also given in much larger amounts. In the past a house buyer would have had to at least make a down payment of something like twenty percent of the home’s value whereas recently, the home buyer was given one hundred and fifty percent of the house value so they could buy the house and have left ov...

... middle of paper ... might not be able to afford, and the buyers themselves for making such a gamble. The process for obtaining a loan should not be so simple, there should definitely be more of a financial back-round check before a loan is given. Private investors need to be given tax benefits as incentive to buy the foreclosed homes and allow the people who lost these homes to live in them until they get back on their feet. These people will pay back the investors fully on a plan they can afford or by taking a reasonable loan for their incomes. The effect of this plan will be beneficial to everybody involved. The investor makes money and helps a fellow human being out, the home buyer gets a home and a place to stay until they find a decent job, and the real estate economy goes up which in the end, helps the nation regain its footholds as the economic superpower it should be.
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