Foreclosure is a growing national disaster in the United States. Every time you tune in to your local news, there is a new family whose house is being foreclosed. Every time you ride around the neighborhood, there is another house up for sale. There are several solutions to this increasing trend including cutting government spending and cutting funds towards unsuccessful government programs, devising financial plans to assist families by setting up payment plans that they can afford, getting communities more involved, more stimulus packages, raising the taxes of the wealthy to lower rates, and easing the limits on section eight housing. Cutting government spending and cutting funding to the government programs that are unsuccessful would solve a tiny piece of the puzzle.
We are not satisfied unless our homes and cars are better than those of our neighbors. This idea of wealth and the value on material possessions instead of family and a job got all of us into the problem. Now everyone needs to do their part to stop it again. Ideally, the current foreclosure crisis that has affected all Americans could result in a cultural shift to value family security and fair business practices over possessions and net worth. I believe that this plan would help to stop the foreclosure crisis and possibly prevent one in the future.
This problem gives us the opportunity to fix a system that is in desperate need of overhaul in order to help people from all economic backgrounds. First, sub-prime mortgage lending practices must cease. This program has allowed people to purchase homes they simply cannot afford. Buyers must evidence a steady flow of income, show a high credit score, and the ability to pay off debt. Loaning substantial amounts of money to people who have no way of evidencing that they are capable of paying off loans is a reckless practice.
The current real estate crisis that America finds itself in is one of the greatest challenges America has ever faced. America’s troubles are further compounded by increasing unemployment of American citizens and environmental problems like global warming. Solving any one of these problems would be a Herculean task, yet they must each be addressed in order to protect American families from disaster. However, it is possible to find a solution to the problems of the real estate crisis that can also be used to improve the problems of the unemployment and environmental destruction. The first part of the solution involves the United States government purchasing the homes that have been foreclosed and using them to offer temporary housing to homeless families.
Therefore, attracting people’s attention away from asking the federal government to help them and turning it towards these organizations will ultimately result in an easier way to get assistance/advice and give the federal government the time they need to create the solutions the people want. A foreclosure is a messy situation. Everyone loses money in the process and it is hard to solve the problem once it has begun. Hopefully, by possibly using these and other suggestions, the foreclosure rate will drop and people will be able to realize the American dream of owning their own home again.
(cited on Bloomberg) shows that 3.9 million notices of foreclosure were sent to homeowners in default for 2009, and 3.4 million were sent in 2008. That being said, the current crisis is already being addressed with provisions that in the long run will stop the constant stream of foreclosures. The $8,000 tax credit was extended... ... middle of paper ... ...ir accounts protected by the FDIC. In conclusion, these reforms represent a new, comprehensive approach toward addressing the foreclosure crisis. By removing the capability of rampant exploitation and speculation in the housing market through new regulations, empowering the FHFA to enforce these regulations, and creating a mortgage payment assistance program with the revenue generated there is no conceivable reason why we should ever fall under such dire circumstances again.
Another great fault was caused by many people who went out and purchased homes when they did not have the actual funds to. When we look at the crisis in a larger spectrum, the guilt should be spread to each and everyone because we each played a major part in this wrong doing. I am sure that by now, the banks have reasoned with themselves about what caused the abundance foreclosed homes and how they can change. The real estate professionals including agents, salesman, appraisers, brokers, and many others have also realized where they have gone wrong and are paying the penalty for it. 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.
Along with moratorium, we should not only encourage the banks who have received money from the government to cover the basis during this time period but we should force them. The taxpayers bailed the banks out and it is t... ... middle of paper ... ...ts that will come in the future will go directly to the banks instead of the homeowners. Making it possible for every home to refinance would dramatically drop the number of houses undergoing foreclosure. All in all, the foreclosure market is growing at an ever increasing rate. Without government help the economy will continue to drop and houses going under foreclosure will continue to increase.
This is why the government should create the Forgiven Package. The Forgiven Package is a short-term plan that will help home owners catch up on their previous balance, which will stop them from going into foreclosure. First the family’s financial status should be looked at to see what the household can afford to pay and what they are paying now. Then there should be arrangements made so that there is a reasonable payment due each month that the family can afford, this should be done by looking at the amount of income coming in monthly and annually. For 3 months the home owner will be responsible for paying on time and each time that the home owner makes 3 months consecutive payments the government will pay off a certain amount of the previous balance due.
The credit score is the reason a lot of people are not able to refinance their homes. The credit score should not be the determining factor. Other factors should include the longevity on the job; the ability to pay the loan at a lower amount; a lower interest rate; consolidating other debt with the mortgage loan and converting ... ... middle of paper ... ...n afford to have it placed on the loan at the onset. The Private Mortgage Insurance (PMI) should be eliminated after the homeowner has made payments on the house for two years. Although the insurance is used to help the mortgage company in case of default, it can be an unnecessary burden on the homeowner.