How To Solve The Foreclosure Crisis Essay

How To Solve The Foreclosure Crisis Essay

Length: 1935 words (5.5 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

Solving the foreclosure crisis is a vital step toward the country’s economic recovery. The sooner America can resolve this crisis, the more rapidly banks will recover financially, home values will begin to rise once more and American citizens will return to work. The purpose of this essay is to provide a viable solution to the foreclosure pandemic. This proposal will benefit the homeowners, taxpayers, businesses, and the financial institutions in America. It will not benefit every household experiencing a financial hardship; however it will enable numerous American families to keep their homes. It will also aid in a more rapid economic recovery for America.

Why the HAMP program is failing

The Chicago Tribune dated December 11, 2009 reported that lending institutions are initially working with the HAMP program by accepting a temporary reduction in monthly payments, but only 38% of the trial modifications have become a permanent modification. The article explained that the lending institutions were bringing payments down drastically. One example I read of a lending institution’s failure to permanently modify the loan was a monthly mortgage payment going from $2,200 a month, down to $686 a month during the trial period of the modification process. After the trial period was over, and the homeowner had made every trial payment on time, she was still denied a permanent modification and was forced into foreclosure.

I believe the HAMP program, despite its wonderful intentions, is failing to reduce the foreclosure rate substantially. This, in my opinion, is due to the reluctance of the lending institutions to lose profits and/or potentially accept a loss on their investment by participating in this program. The HAMP program ult...


... middle of paper ...


...ach loan than they anticipated receiving on the original note. In the above example, the lender profited an additional $31,909. This increase in profit will eliminate the financial institutions resistance to modify the loans, boost investor confidence, which will keep investor’s money in the banks and purchasing mortgage backed securities once more. This will allow the banks to have more capital to lend. The trickle down effect will reach small and large businesses and they will be able to employ workers again and stimulate the economy. The taxpayers of this country will not have any tax burden placed on them because this program still makes individual homeowner’s responsible for the mortgage amount they agreed to pay. This program will keep the American dream alive and start to return wealth to American families and strengthen the financial institutions.





Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

How to Solve the Foreclosure Crisis Essay

- How to Solve the Foreclosure Crisis The subject of foreclosure is one that I know too well. I am currently trying to get my house out of foreclosure. It is not that I have not been in contact with Countrywide (now Bank of America), I have been in contact with them since July of 2008. I even signed a Modification Agreement in March of 2009. I thought that everything was okay. I sent all the paperwork in, signed and notarized, along with all of the financial information I was required to include with the Modification paperwork....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1265 words (3.6 pages)

How to Solve the Foreclosure Crisis Essay

- “How did we get ourselves into this mess?” This is the question I’m asked by clients of mine who don’t understand what happened to the housing market and want to know how and when we’re going to recover. Most people understand that the real estate market is cyclical. It’s always had its up’s and down’s. Fellow Realtors of mine who have been in the business for thirty plus years have often said “this is worse than they’ve ever seen it”. We often find ourselves in friendly debates of what we think it’s going to take to “fix” things....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1555 words (4.4 pages)

Essay about How to Solve the Foreclosure Crisis

- How to Solve the Foreclosure Crisis Imagine a young couple was married and bought a house together. They were happy they made an investment together that they would never regret. A few years later, the company the husband worked for suffered critically by the recession and he was one of the hundreds of people who got their job cut. They now have two babies to feed and have to choose between food and the mortgage. They soon began to miss their monthly payments. They waited until things became unbearable to negotiate the loan or an extension to repay the bank but their efforts failed....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1286 words (3.7 pages)

Essay on How to Solve the Foreclosure Crisis

- “I can see clearly now, the rain is gone. . .” This is the music that was playing in my mind when a solution to our foreclosure crisis took shape. I was in one of my electrical engineering classes and was thinking very deeply about my assignment. Simultaneously, my mind kept flashing the images of hundreds of homes in my county going into foreclosure. More homes went up for sale every week. Driving to school as the semester dragged on showed us all how hard our neighbors were struggling and failing in Oakland County....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1799 words (5.1 pages)

How To Solve The Foreclosure Crisis Essays

- "How to solve the foreclosure crisis." BATTEN 1 Unemployment, it is all too common of a label in this day and age for the American society. In Joshua Cooper Ramo’s article, “Unemployment Nation,” he clearly states: “the government can’t hire everyone” and that there is a decrease in jobs nationally. Ramo’s article was published in the Spetember 21, 2009 TIME magazine and includes many personal tragedies that happened to real Americans who have lost their jobs and are unsuccessful in finding another employer....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1091 words (3.1 pages)

How to Solve the Foreclosure Crisis Essay

- Foreclosed homes have become a menacing commonality in nearly every neighborhood in the United States. These foreclosed properties problems range from unkempt yards, broken doors and windows, as well as becoming dangerous havens for drugs and violent acts of vandalism. In addition, empty foreclosed homes drive down property values of surrounding homes and neighborhoods. Many of these homes became foreclosures because the buyers could not afford the payments. This inadvertently ruins not only their credit scores, but also ruins the chance of owning a home in the future....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1585 words (4.5 pages)

Essay about How to Solve the Foreclosure Crisis

- Foreclosure has been a tragedy across America. One out of every two hundred homes will be foreclosed upon. That is approximately 3,000 people in Washington D.C. losing their homes every year. Also, every three months 250,000 new families enter into foreclosure. Things that we can do to solve this crisis are Educate Citizens, Banks need to lose the greed, and more job opportunities. For one the crisis started within the people. Citizens should take it amongst their self to obtain the knowledge that could possibly help them in these types of situations....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
971 words (2.8 pages)

How To Solve The Foreclosure Crisis Essay

- The foreclosure issue in the United States is not one that will disappear overnight, and while it is easy to over look statistical information saying that a certain number of homes are foreclosed on each day, such things only serve to distance a reader from the real fact: there are people without homes, and a solution has not yet been found. If knowledge is power, then why do we, as one of, or perhaps the most powerful nation in the world not have it. The answer is that it is present, but in the wrong place....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1221 words (3.5 pages)

How to Solve the Foreclosure Crisis in America Essay

- The foreclosure crisis in America can only be resolved by every American citizen working together to build a stronger America by changing the way we make decisions for expenditures in our lives. We must stop overextending ourselves beyond our economic means. The foreclosure crisis of America has been caused by Americans borrowing money to purchase a home that they cannot afford. Lending agencies have allowed Americans to borrow more money to buy a home than they can afford. Each lending agency seemingly used logical reasoning that if they did not lend the funds to the homeowners, another agency would....   [tags: Economics, Mortgage, Housing Crisis]

Powerful Essays
1887 words (5.4 pages)

How to Solve the Foreclosure Crisis Essay

- The foreclosure crisis has become as confounding as the old, neglected house on the corner of your street. With shattered windows and wild lawn, no one knows what to do with it, how to save it or even get rid of it. Public and private institutions have tried this and that to patch the ongoing economic blight: lowered interest rates, credit counseling, foreclosure workshops, short sales and bailouts. Nevertheless, the number of foreclosures has relentlessly continued its climb. This ascent has threatened the viability of entire neighborhoods and the value of most families’ largest and most important asset....   [tags: Foreclosures]

Powerful Essays
2195 words (6.3 pages)