Feasible Solution To The Foreclosure Crisis Essay

Feasible Solution To The Foreclosure Crisis Essay

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By now, everyone in America has a pretty good idea of the devastation that the financial crisis has caused on our people. Tens of thousands of people in this country right now are at some stage of the foreclosure process. These are not deadbeats who just decided not to pay a mortgage. These are hard working individuals who have now had to make the difficult choice of keeping a roof over their families’ heads or eating.
MAIN IDEA
I would like to propose a feasible solution to the foreclosure crisis. I call this plan “Operation: Mortgage Saver”. My plan to help pull Americans out of the foreclosure crisis is to create legislation for all new mortgage holders to be required to offer an insurance on all new mortgages for the life of the mortgage. Legislation would not only require mortgage issuers to offer “mortgage insurance,” but also a cap on how much the insurance can cost. This cap would be reflected as a percentage of the value of the mortgage.
In other words, if a lender issues a mortgage: they have to hold insurance on that mortgage for the life of the loan. If the home owner refinances in five years with another company, then the original issuer is no longer responsible for the insurance, but the new issuer takes over the insurance.
Then, the legislation would put a cap on how much the insurance should cost the new homeowner. This would be the opposite of the automobile insurance industry that simply allows current markets to dictate how much to charge. This should alleviate exorbitant charges being put on homeowners. Now, let’s see how it would all work.
HOW IT WORKS
Anytime that a new mortgage is issued, the issuer would be required to offer a “mortgage insurance”. The new homeowner would be requi...


... middle of paper ...


... out. By helping people get through their own financial crisis, the tax payer can focus this same money on things such as creating new jobs so more people can own homes.

I feel that if passed, this could be an incredibly important piece of legislation. I feel that this would enable so many homeowners to avoid losing their homes. It would empower the banks to be able to lend with more confidence. And it would take the tax-payers off the chopping block every time a bank or lending institution had too many bad loans on their books.
The American public needs the surge of confidence that this bill could allow them. I’m afraid it is too late to help those that are in the foreclosure process now. But, by helping for the future, we can ensure to ourselves that this past couple of years has been a learning process and we will not make these same mistakes again!

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