Foreclosure Crisis: A Time for Change Essay

Foreclosure Crisis: A Time for Change Essay

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The past decades have dictated our economic policies; the housing market was fed by the politicians instilling the thought that every person should be a homeowner. According to a speech by President William Clinton in 1995, he boasted about making homeownership a reality, “The goal of this strategy, to boost homeownership to 67.5 percent by the year 2000, which would take us to an all-time high”(Wooley). As a result of political ploys like this, banks and lending institutions came up with products such as the 107% financing, interest only loans, negative amortization programs which allowed loans to start at a 1% interest rate, sub-prime credit packages for those homeowners only 1 day out of bankruptcy, and the no document qualifier programs for prospective homeowners that could not verify sufficient income to be approved; swept our nation. With the vast number of investors, realtors, and politicians compelling all people to become homeowners; the banks strategized with innovative financing programs to meet every credit/income profile. Financing concepts were camouflaged creating a false sense of security that homeowners could refinance into a new fixed mortgage but not realizing that if the market conditions deteriorated, these concepts could not be fulfilled and thereby destroying their continuation of homeownership.

Due to the sharp down turn of the economy, the masses of job losses, reduced incomes, and the deflated property values, people who were in loans that were sub-prime, negative amortization, or intermediary loans such as a 2,3,5,or 7 year fixed were unable to refinance their mortgages due to income qualifying and depressed property valued. The government came out with the HARP, Homeowner Affordable Refinance Pro...

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...too many homes remain on the market” (Schaefers). We as a nation need to rebuild consumer confidence and not only come to the assistance of the few but the many homeowners that bought into the concept of the American Dream of Homeownership. President Obama please come to the help of all homeowners that don’t fall into the criteria of the HARP program. Expand the program so the American people can stay in their homes and continue to live the American Dream. The sooner we act, recovery will take place and hope will be restored to the American People. President Obama, today is the “Time for Change” for all homeowners, tomorrow will be too late.

Works Cited:

Schaefers, Allison. "Economists at odds on speed of Recovery." Web. 26 Dec. 2009.

Wooley, John T. "Remarks on the National Homeownership Strategy." Web. 28 Dec. 2009.

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