How to Solve the Foreclosure Crisis
Foreclosure is when an individual loses their right to the ownership of their house to the bank that holds their mortgage. This usually occurs when the owner of the mortgaged property gets behind on their payments and the bank loses faith that they will receive their payment. In order for the bank to avoid further money losses, they repossess the house and then auction it off for no less than the money still owed on the mortgage of the house. In this way, the bank believes that they can make even more money since the mortgage amount previous to the repossession is still kept by the bank. Foreclosure is a relatively common problem that is currently being experienced at a higher occurrence rate across the whole globe. The rate has become so high in comparison to historical experience that we are now considered to be in a state of crisis. However, the current foreclosure crisis can be solved by educating potential mortgage applicants and reigning in the number of higher risk type mortgages that banks offer.
Part of solving the foreclosure crisis is in the hands of the average person. After all, the first step in solving the foreclosure crisis is to keep new people from finding themselves in the unfortunate situation of owing more for their house (mortgage) than they can afford. When a person is able to afford their house, they are able to consistently make the respective mortgage payments.
A funny thing about money: Although you can’t take it with you when you die, you do need it to live. However, people must live within their means - a person should buy within what they can afford to immediately pay for and work towards creating a savings account. This is the secret to avoid finding yo...
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... ways to avoid foreclosure and lessen the overall amount of individuals whose houses are foreclosed. First, an individual must live within their means and avoid purchasing a house worth more than they can afford for the whole term of the mortgage. They should save their money before making a big purchase as a precaution for unseen events. At any point in time, a job could be lost or someone could come down with a disease which could possibly interfere with the payments. If a person saved some money, then this may help the situation a bit as they will still be able to make mortgage payments using the money they have in savings. Secondly, banks must educate applicants on the various types of mortgage loan options and not offer so many high risk types of mortgages. Following these two things would greatly help lessen the foreclosure crisis, if not solve it entirely.
To solve the foreclosure crisis we must take a multi-pronged approach that tackles the issues making the situation worse and that caused the problems in the first place. Our goal is to do this in an efficient and time conscious manner. Any solution is going to have its positive and negative aspects but we must try to maximize the former and minimize the latter.
Before we begin to implement any changes that will reverse and/or fix the foreclosure crisis, we need to understand the causes of the crisis. There are direct causes and correlative causes. The most direct causes have been discussed ad nauseum in the media. Some of these direct causes include; high (property) taxes, loss of jobs, resetting adjustable Rate mortgages, loss of credit rating (due to other causes that result in the inability of the borrower to pay bills on time or at all), medical bills (also a leading cause of bankruptcy) and an overall spend-thrift zeitgeist. These direct causes are easy to spot, but I believe that they are a distracting muse for our ire. The real causes for the foreclosure and overall financial crisis have more to do with laissez faire market system in general.
There is a solution to the Foreclosure Crisis. I do not propose that this is my own answer, but that it is born out of Love. The love for all my family and friends and the country as a whole is the reason for this proposal. Their fates and indeed the fates of our way of life in America depend on what we do at this time in history. The admiration and love for the foundation on which this country was established is an additional motivating factor. Needless to say we can neither turn our backs on all those who have shed blood and even given their very lives for the principles of our America. To allow this jewel of freedom and prosperity to falter and deteriorate would be the most monumental political plunder ever recorded. We can not afford to blow this opportunity.