preview

Solving the Foreclosure Crisis

Powerful Essays
The escalating numbers of home foreclosures since 2006 to 2008 has grown from 268,532 to 1.4 million, which is an expansion of more than five times (GDAEman 2008). This skyrocketing dilemma has many factors that contributed to its epic growth, and much needs to be set into practice before the housing market turnaround will be evident. Many families are at a place where they need loan modifications, but a Bank of America representative stated that B of A is first dealing with the homes facing foreclosure. For those individuals who have faithfully kept up the mortgage payments and are in good standing with this lender, not much is being done. This last group of consumers and many homeowners that were responsible and are in need of help due to unemployment should be the focus of much needed solutions as part of the real-estate recovery.

According to many research articles and papers written on the United States’ economic crisis, there are various causes that affected the financial system; one is the greed of the loan institutions that made a lot of money off bad mortgages. Mortgage brokers determine which people were granted loans, but they were not made accountable because they passed the bad debt to the consumers in “mortgage backed assets” and then took commissions for approving poor loans (Jarvis, 2009). The responsibilities were sold to the trusting investors who were promised a good return. However, homeowners couldn’t afford the explosive debt incurred, which lead to catastrophe domino affect of many people losing their homes (Jarvis, 2009). Entrepreneurs became wealthy off of “flips” (fixing up dilapidated homes to sell at a much higher price), and because most of them had more capital than many homebuyers, the average i...

... middle of paper ...

...es. Receipts of receiving resumes and other proofs should be presented, and for every interview, a sign form will be required.

Only these three groups should receive financial aid as the others would eventually need bailout again or loose their home anyway.

Before the government and banks bailout homeowners, these institutions should have studies on what groups are going into foreclosure and reasons why these people are at risk or are losing their homes. People that are responsible and had a good job and took out good loans should be the first in line for aid, and people that took out risky loans and bought too much house for their incomes should have no bailout. The government needs to be wise and help out people that can eventually pay back their loans and are tax payers, so America doesn’t return to the same dilemma that everyone faces at this time.
Get Access