The Foreclosure Crisis Essay example

The Foreclosure Crisis Essay example

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I often used to watch a show called “Extreme Makeover” where a team of builders would come to a neighborhood, build a need worthy family a beautiful new home, and then just give it to them. “Wow! What a lucky family,” I would say. “How fortunate.” However, as time went by, that same family would be in the news again. Why? The house was in foreclosure. The people had gone to the bank and taken out a mortgage against the home, then spent all the money they got for it on other things.
In a way, isn’t that how the whole foreclosure mess happened? Easy loans were freely granted to families who really didn’t have the knowledge or financial stability to responsibly handle a mortgage. When interest rates began to rise on these easy loans, well, you know what happened. This leads me back to my show. I considered the gift of a home to these people such a blessing. My parents scrimped and saved to make their mortgage payment every month. They did without buying things, budgeted their money, saved, and created an emergency cash reserve. Did these families realize the implications of what could happen if interest rates went up on the easy loan? Apparently not, and this got me to thinking.
Extreme Makeover hasn’t been canceled (yet) but wouldn’t it be a better show if there were safeguards in place to prevent the foreclosure of the home in the first place? This would involve the network, the sponsors, and the powers that be of putting stop gap measures into place before the cheers and tears of the episode ever even take place. For one thing, if a family has an imprudent loan, then the interest rate has to remain low. This isn’t the time to tinker around with it like a yo-yo. If stability is the goal, then interest rates...


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...trouble. If someone lost their job, and they can’t pay on their mortgage, let’s get that loan away from the bank and into the hands of a program designed to keep a family in a home, not out of it. Utilize Fannie Mae and a trade down program. If this means redesigning the entire foreclosure process, then so be it.
The program, unlike the show “Extreme Makeover,” would not be a something for nothing idea. It would require the commitment of direct deposit into a mortgage payment account, financial responsibility classes, and a work program. It might be easier just to let it all come crashing down, but the hard work method will be more rewarding in the long run. Why? Because the word foreclosure won’t loom around the dinner table of a hard-working family, instead it will be what used to happen before they were able to take action in this program to prevent it.

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