Solving the Foreclosure Crisis

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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. Who is it at fault for this? Well the banks giving the loans and the people taking the loans are to blame. They should not have speculated about inflation in the future or their ability to cover those loans. This is why foreclosure and economic crises seem to always coincide; as soon as the economy takes a dive, spending falls, inflation slows, and peoples’ ability to pay their bills and mortgage go out the window. As more people lose their homes everywhere you look, the confidence in economic recovery that is necessary to revive spending and restore the economy also dies.

This is what causes foreclosure, but how can the foreclosure crisis be resolved and prevented from recurrence? Basic economics dictates that the economy works in cycles with its ups and downs. Economic downturns are a natural part of a world with limited resources. Since preventing economic recessions is almost physically impossible, the best that can be done is to try to stop the causes of the foreclosure crisis. This can be done by placing more strict restrictions on who the banks can offer loans to. For instance, more thorough background checks of financial history and credit, plus a more pessimistic outlook on the progression of the economy will result in le...

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...there lesson the first time. For instance, filing bankruptcy removes all debt within reason, kills your credit and leaves you washed up with little to know economic confidence in your future. A program that aided in the lowering of payments and extensions of deadlines but still with a firm thumb on the backs of these people could be the best thing. It would teach self-control, better planning, and would offer a second chance to all the families that need one. Many private organizations doing similar debt counseling are popping up all over, but with government support these organizations could help in resolving the debt issue and the foreclosure crisis. Also a stricter eye on who is given loans must be enforced to prevent the banks from making the same mistake again. So with all these changes, the American dream can be attained without fear of the foreclosure crisis.
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