For the last decade, home buyers and owners have enjoyed the fruit of a very sweet housing market. Owning a home is an American dream for most. However, the disparity between those who own homes and those who do not grows bigger every day. This all changed with the help of our government and it is time for a reversal.
I find it very disturbing as I drive down the road and see the foreclosure signs in the windows of houses someone used to call home. It makes me wonder about their situations. Was it a lack of responsibility? Did they lose their job? Was there an illness or other tragedy in their family? Where do they live now? Are they homeless? Are they renting a house at a price higher than their former house payment was because of the high rental demands?
Let’s take a step back to see how this downward spiral started. I remember when we could not turn on the radio or the television without hearing ads asking you to refinance your existing home or take out a loan for 125% or of the homes appraised value. Or ads asking you to take out a third mortgage or a revolving line of credit based on the equity of your home. And, if you had excellent credit you could walk onto a car lot and walk off with any car on the lot just because you had excellent credit. I remember when we got credit cards randomly sent to us through the mail telling us to sign the back to activate the card and it was ready for use. Income to dept ratios were not even thought about years back. All these things marked an era that encouraged middle class and lower income Americans to live beyond their means.
Now there are many people without homes because they have gone into foreclosure because they are not making house payments due to extenuating circ...
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...t with people just hoping to get out of it before foreclosure.
The possible outcomes of a rehabilitation program; families will be restored to the American dream of homeownership and develop confidence in their buying power and the stability of their families. Banks would have a consistent funding stream because of the direct deposits on actual customer paydays; and homeowners can pay their bills and banks can pay their staff so they can keep their jobs and help restore a large part of the economy. Home owners have peace of mind knowing their bills are paid automatically and on-time and that no one is going to snatch their homes from underneath their families and sell it for a portion of what is owed on it. The pricing on housing will once again rise in a controlled environment. Also, we can assure ourselves that this particular crisis never show its face again.
In conclusion, we have determined that the housing crisis that the United States faces today is a huge problem. We have discussed the striking similarities between the Great Depression in the 1920s and 1930s and today's problem. And I have presented my solution to the problem and how I think it should be prevented in the future.
As of December 29, 2009, the website Foreclosure.com reported that over 2.2 million homes in the continental USA are in some form of foreclosure, 486,323 are in pre-foreclosure and 465,490 have already been foreclosed. Over seven hundred thousand have tax liens against them and 87, 389 have been sold in Sheriff sales. Along with the homeowners, mortgage companies and banks have suffered tremendous financial loss. However, the homeowners lost so much more; they not only lost the roof over their heads, but memories, their self-esteem and their piece of the American dream.
While no one likes the idea of turning people out of their homes, when you buy something you can’t afford, you have to return it. When you make a bad business decision, you have to take the consequences. Capitalism doesn’t work when there is no downside to risk – that downside is there to make sure that the system works properly. The most sensible, soundest and, ultimately, kindest solution to the debt crisis caused by the real estate bubble is foreclosure – expedient, easy, simple foreclosure. This is the best way for the housing market to grow again, which in the end will give people the opportunity to enjoy the piece of mind that comes from knowing they own a home they can afford and can really call their own.
The frequency of foreclosure in our nation today is dangerously high. The strain from the recent economic downturn has put many families and individuals in a financial chokehold preventing them from being able to make their monthly mortgage payments. Consequently, many of these people feel they’ve punched a one-way ticket to foreclosure. With all these homes being foreclosed on, we face a very real crisis.
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.