Well the rates of foreclosure have decreased significantly since the peak in the 2008 housing market. The reason? Banks and lenders have learned their lesson and have set stricter guidelines in order for people to be approved. Banks are now looking at credit scores, possible collateral for the loans rather than making quick money off high interest rates and bogus approvals. The foreclosure rate is still a big economic problem, not to mention the increasing unemployment rate. The unemployment rate has reached nearly 11% this year due to bank failures like AIG, JP Morgan, and Goldman Sachs, which have really hurt the economy. To add onto that, American car companies like Ford and General Motors have gone into bankruptcy which have depleted the number of jobs available in the United States. People are losing their jobs, have come up empty when it was time to pay the mortgages. Sadly, they are sunk in debt and can’t find work in order to support their families. Too many people are becoming victims in this cruel economic time and losing their homes.
My proposal to fix this problem, is to restructure the foreclosure practices that banks are resorting to. The reason banks do it? Banks have investors they need to please; they have annual reports to publish to the public. They are pressured just like every other public traded company to produce good results to satisfy investors. They have to cover their losses somehow and maintain a reputable image. All of the faulty loans issued in 2006 with high interest rates produced a quick profit, at the borrowers expense. Their income reports were off the charts as they were approving loans left and right. From a short term perspective, they cashed in on the real estate craze. However, by 2008, all...
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...e for a family with two working parents totaling an income of $80,000 to afford. It’s a win-win situation now for both sides; the banks get their money and the family gets to keep their home.
As for the increase in the unemployment rate, I propose the banks/lenders give the home owners a three month moratorium or period of leniency. The banks will agree not to foreclose upon the property and let the home owner try to get back on their feet. Three months is reasonable amount of time to find a new job. The missed mortgage payments will be paid back in installments on top of the normal monthly payments until the home owner is caught up. It is so powerful an incentive for the home owner not to lose their house and keep the payments coming along. The economy would be running smoothly as people are not forfeiting on loans and jobs are not being lost due to bank failure.
hardship, the only option available to ensure that they can afford their monthly mortgage is to
The last quarter twelve percent (12%) of American homes are in default of their loan, or in foreclosure. Add that to the previous four quarters and that is eight point seven (8.7) million homes in crisis. (Further on known as HIC's) The United States “Bail Out” helped major mortgage corporations, and their chief executive officers (CEO's), but not the families that are in, or were in these HIC's across America.
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.
The country is certainly in crisis, but the crisis is not being caused by mortgage foreclosure. Foreclosure is simply a mechanism for people to deal with a debt they can no longer afford. Rather than being a crisis, the potential onslaught of home foreclosures (which has been slowed somewhat by the Obama administration’s “Making Home Affordable” program) is actually market forces hard at work cleaning out the mess in the real estate market caused by too much cheap money loaned to people who were not sound credit risks to buy homes they could not afford. When home prices are completely out of line with wages and people who would normally have a hard time getting a friend to loan them $20 are able to take out interest-only loans to buy over-priced housing, something is very, very wrong. While it may be painful for many people, the real estate market collapsing, including thousands of inevitable foreclosures, is not a crisis, but rather a result of the real crisis – unserviceable debt.
...e house). In addition, minimum down payments should be set up for home mortgages of at least 10% for example and banks should ensure that borrowers have a flow of income.
In essence, the problem leading to the foreclosure crisis is the recent decrease in people’s ability to make their loan payments due to job loss and lower wages brought on by the economy’s weak state. Rather than throw billions of dollars at big banks in the hope that they find ways to help the homeowners’ loans, the government should attack the problem through the individual. Simply, the government aid being spent in the hopes of stimulating the economy should be funneled toward reducing the balance of home loans to make the monthly payments affordable for the owner. By funneling the government aid directly to the American home owner in need, the economy would greatly benefit as homeowners regain their footing with their budget because the economy and foreclosure are directly related. When one hurts, so does the other; when one prospers, the other does as we...
The foreclosure crisis has been devastating. Families no longer able to afford mortgage payments are forced into bankruptcy, while banks find themselves with properties valued at less than the loan principal. Solutions proposed thus far have primarily focused on loan re-modification measures that only slightly relieve the financial burden for homeowners and frustrate lenders who are forced into less attractive loan terms. However, one solution not being discussed in congress may resolve the housing market slump while benefiting families and investors alike.
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.
Not since the Great Depression of 1929 has America experienced such economic chaos, job and housing loss. Perhaps housing loss was not as wide-spread then since there were fewer homeowners. The government supposedly put in measures designed not to let those on Wall Street cause the same thing to happen again. Yet, here we are some eighty years later in the same situation. It seems that history keeps repeating itself. The question is why? The answer is greed. Unfortunately, the question "how can we stop it from happening again"? cannot be answered in one definitive statement. Of course the solution to preventing home foreclosures is "prevention," which in itself comes with a lot of variables.
It’s hard when a home becomes a house: left with walls, stripped of memories. It’s disheartening when a family becomes a number: left with foreclosure, stripped of dignity. In 2007, over-extended borrowers began to default on their sub-prime mortgages; mortgages that increased as more and more families chased the American dream during the housing boom. The interest rates were “teasingly” low, but more detrimentally, they were variable. When mortgage rates were readjusted, homeowners found that they could no longer pay the upped monthly payments. Such sucked them in to the dizzying downward spin of heightened debt and negative equity. Such sucked them into the foreclosure crisis.
“One out of every two hundred homes will be foreclosed every month, making 205,000 new families enter into foreclosure,” Mortgage Bankers Association. The housing industry in the United States is undergoing an unfortunate crisis. There are way too many homes being foreclosed, which cause a ripple of problems.
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.
Buying and owning your home is part of the American dream. Although the dream itself has since changed, the home still remains the main focal point. Today owning a home doesn’t necessarily mean a house. People now buy duplexes, cooperative apartments, and condominiums. For some families it could take up to a couple of generations before it’s able to have the capabilities of buying a home. To many people it means a certain achievement that only comes after years of hard work. It is a life altering decision and one of the most important someone can make in their lifetime. The reasons behind the actual purchase could vary. Before anything is done, people must understand that it’s an extraneous process and it is a long term project.
Just 54 percent of African Americans, who suffered disproportionately heavy losses during the foreclosure crisis, now say homeownership is very much a part of the American Dream, among the lowest of any demographic group, according to the Post-Miller poll (Haynes,2015). The dream is still alive and a person has to stay within their current income. According to financial expert a home should not exceed 30% percent of income. Anyone who chooses to go beyond the range is putting themselves at risk. A home supposed to be shelter such has an apartment.