Due to the recent economic downturn, it has become obvious that the government of the people must act swiftly and effectively in order to curtail the foreclosure rate that is hitting lower and middle America. Because the money that is going to pay towards relief from foreclosure agencies is money that will never enter into the American production system and stimulate growth, it is imperative that direct help be made. I support the plan of a direct debt relief program to all Americans who are facing foreclosure due to inflated adjustable rate mortgages or who are facing foreclosure due to a spike in costs of other sectors of business, such as healthcare or cost of living. I would not support bailing out the people who have not already taken actions upon themselves in order to attempt to self alleviate the crisis.
According to an article written by Glenn Setzer for the Mortgage Daily News entitled Foreclosures Cost Lenders, Homeowners, the Community, and You Big Bucks published on June 2nd of 2008, the average foreclosure costs $77,935, while the average cost of avoiding foreclosure is $3,300. If homeowners who can provide documentation as to the steps they have taken to fix their mortgage problem such as lowering of their monthly allowable discretionary budget, as well agreeing to a set of conditions that would arise from said agreement, then they would be eligible for a debt relief program. This program would mean that the government would pay off their debts owed to mortgage companies, on the conditions that :the members of the family who deals with finances attend an educational program aimed at preventing the situation from occurring again, the family have a primary breadwinner who is gainfully employed or is currently activ...
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...been greedy with their fiscal practices (or risked all their money in a single investment) are not damaged in the transition to the new company.
The power that the government derives to rule does not stem from large businesses or corporations. Instead, it is drawn from the consent of the governed. Because of this, government should be viewed as a tool which people may utilize in order to advance their position in life. By directly bailing out the individuals who are victims of the foreclosure crisis, the government is intervening on behalf of those who are in need of help. This would drive more money into the American market system, as well as force banks to rethink their lending policies while also maintaining the higher ease of entry than would be found had banks and mortgage companies been bailed out and not forgiven the debt of people who are unable to pay.
The last quarter twelve percent (12%) of American homes are in default of their loan, or in foreclosure. Add that to the previous four quarters and that is eight point seven (8.7) million homes in crisis. (Further on known as HIC's) The United States “Bail Out” helped major mortgage corporations, and their chief executive officers (CEO's), but not the families that are in, or were in these HIC's across America.
In essence, the problem leading to the foreclosure crisis is the recent decrease in people’s ability to make their loan payments due to job loss and lower wages brought on by the economy’s weak state. Rather than throw billions of dollars at big banks in the hope that they find ways to help the homeowners’ loans, the government should attack the problem through the individual. Simply, the government aid being spent in the hopes of stimulating the economy should be funneled toward reducing the balance of home loans to make the monthly payments affordable for the owner. By funneling the government aid directly to the American home owner in need, the economy would greatly benefit as homeowners regain their footing with their budget because the economy and foreclosure are directly related. When one hurts, so does the other; when one prospers, the other does as we...
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.