How to Solve The Foreclosure Crisis Essay

How to Solve The Foreclosure Crisis Essay

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Due to the recession that our economy has recently experienced, American consumers are currently undertaking serious financial problems. Such difficulties are obvious in real estate, with homeowners having to deal with a major foreclosure crisis. According to studies by the Mortgage Bankers Association, one out of every 200 homes will eventually be foreclosed, and 250,000 families enter into foreclosure every three months. Although the worst times are still in our future, with help from the United States government, we as citizens will eventually overcome the horrendous situation of America’s current real estate market.
To combat our nation’s foreclosure crisis, I believe it is necessary to inform Americans about their options, rights, and duties as homebuyers, before they decide to own a house. Perhaps free, mandatory classes should be required before anyone is allowed to sign a lease; to ensure that the buyer knows how to properly handle their new responsibilities as a homeowner. The curriculum of the class should teach how foreclosures work, and valid methods to prevent them, such as: negotiating a temporary delay in payments, keeping current on home payments, applying for government assistance, negotiating a permanent loan restructuring, and refinancing the home debt (National Consumer Law Center). With an effective plan set forth for homeowner education, the number of foreclosures is sure to decrease in the future.
The Homeownership Preservation Foundation reports that a majority of homeowners have first-time loans, which are no older than three years. In order to avoid foreclosure, homebuyers must first know the exact definition of the term. Few people are able to purchase homes completely with their own money; they mus...


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...d prepayment penalties on the old mortgages”. Besides the negative aspects of refinancing, if done correctly, it subtracts a considerable amount of money from the monthly mortgage payment.
Even though the idea of a mandatory class may cause some prospective homebuyers to become uncomfortable, the long-term benefits definitely make the initial strain worthwhile. Robert D. Dietz, author of “The Social Consequences of Homeownership”, reports that homeownership has many psychological advantages, along with its economic benefits; according to Dietz, “homeownership is positively associated with physical, mental and emotional health,” and a “high level of neighborhood homeownership enhances property values”. If the government takes the initiative to educate future homebuyers, our country will experience dramatic growth in the number of diverse, affluent communities.

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