Solving the Foreclosure Crisis

More or less the people who are homeless and out of jobs now, have realized where they have gone wrong in their funds a... ... middle of paper ... ...ters into buyers through education and techniques, and then we will have buyers for the foreclosed homes. Overall, banks do not want to take back any more homes then they are able to do, therefore the investors are called in to help ease the flow of homes in any market condition. Realtors help price homes at reasonable prices forth the benefit of the seller. Banks have witnessed the largest error in their felid of expertise and have undergone many changes to heal it. The homeowners have to realize that for their own benefit, if they are educated in financial terms, they can be more aware of what to do in certain circumstances.

The foreclosure crisis is a serious problem. Recessions are horrible for society to endure, but when people are losing their homes all around, the confidence in recovery needed to fuel the economy is eroded away until it seems almost hopeless to end the economic slum. Unfortunately there isn’t a simple solution to the foreclosure problem. The best way to solve any problem is to know what causes it. Foreclosure is the result of mortgage loans being given irresponsibly to people that can’t afford them.

During the time of this economic crisis, many people are foreclosing on their homes because of inflation in the housing market. It is said by the Mortgage Bankers Association that one out of every 200 Americans will have a foreclosed house. In America, that is a lot of homes that are unoccupied. In this time of crisis, there needs to be a way so that people can stay in their homes for just a little bit longer to conjure up the money to pay off their bills during this recession. Today, millions of Americans are suffering lost jobs and cut hours because of the recession.

The United States economy is in trouble and the housing market is suffering in a way we have not seen since the great depression. There are many home owners who are having trouble with their mortgage payments, and therefore they have fallen into foreclosure. Additionally, housing prices have gone down, and therefore the amount outstanding on many mortgages is greater than the value of the home underlying the mortgage. I think the goal of the banks and the US government should be to keep people in their homes. If the banks continue to foreclose at such an alarming rate they will end up owning too many houses and in trying to sell them continue to place pressure on the housing market thereby making it even harder for the economy to recover.

Those borrowers were caught up in the times of too many investors and crazy loans that caused a crash or a bubble bursting effect. I feel that those innocent people should be given another chance by modifying the bankruptcies. It would help if the bankruptcy filing in 2008 and 2009 for people owning only a live-in home, not an investment property, could be erased from the reports. Also, if they would be considered for a 1st time buyer again by ignoring that first bankruptcy filing, many people could repurchase a home helping clear the supply of properties owned by the banks. Implementing the suggested job creations and credit changes should help our nation.

The foreclosure crisis has occurred for many reasons. Banks offered subprime loans and teaser rates. They approved under-qualified people to borrow more than they could afford to repay. These borrowers, so desperate to own a home, borrowed over their means, counting on a future and now non-existent upswing of the housing market to allow them opportunities to refinance at lower rates after teaser rates expired. As the housing market fell, the banks no longer offered the refinancing that these borrowers counted on, and other economic issues caused many of them to be on even less firm footing then when they got their mortgages.

The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens. 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.

Still, now that the house has a mortgage rate that matches the value of the house the homeowner has not been able to find work. In this economic recession, more and more people are losing their jobs or getting severe pay cuts. For a ... ... middle of paper ... ...ngs along those lines. This would be similar to Franklin D. Roosevelt’s New Deal. This would increase the number of jobs for people.

But it is very hard to say “I can’t afford this house” after the banks or lenders have said that you can. A lot of us were pushed into homes that were too much for us to handle because we were told that it’s no problem. Also interest only payments and balloon payments should not be legal. They only benefit the banks, the home owners always get into trouble with those types of loans. We have many houses in foreclosure that can be prevented; one way is to have the banks be regulated ... ... middle of paper ... ...rom that.

Instead of looking for a “good” credit score (620-650), lending associations should be looking for an excellent credit scores (above 660). Also, a job history check should be conducted; a lending association should make sure the person they are giving a loan to is able to hold a steady job for lengthy amounts of time. Lendi... ... middle of paper ... ...one who has rented a house and has a better idea of how to budget so the mortgage always paid on time. During this recession, foreclosure is a nightmare that many Americans are facing as a reality. Foreclosure has done extensive damage to the real estate market due to the number of people who are afraid to buy a home and possibly lose it all.