Solving the Foreclosure Crisis

1130 Words3 Pages

This year, the rate of foreclosure has increased from a problem into a crisis, and it is of increasing importance that the problem be solved. More and more Americans are loosing their homes as unemployment rates rise and it gets harder to pay the bills. High foreclosure rates cause homelessness to rise and banks to struggle. Since home loans are secure in the fact that if payments are not made, the bank can take the house, also called foreclosing it, the bank is less at risk. The problem with this system is that when the housing market is down, the banks cannot sell the house, and lose money in the deal. When banks lose too much money, they are either bought out, bailed out, forced to fire employees, or close down completely.

As a result of the current economic situation, foreclosure is leading to banks going bankrupt; when the economy is doing better, foreclosure is less of an issue. This is because people have the money to pay their house bill when they have steady jobs with decent hours. This is not to say that the economy causes foreclosure, it just leads to it when people make irresponsible choices. During times of prosperity, many Americans buy more new stuff they do not need than they do in rough times.

When thousands of Americans buy new, they use credit cards and other loans, an unwise decision. If more people only bought what they could pay for in cash, excluding homes and student loans, and saved instead, in bad times they would have the money to keep their homes and buy food without problem. Instead, people often figure they can just make minimum payments on their loans and spend the extra on extravagances. When their incomes decrease, they are proved wrong. Among the results of these decisions is foreclosure.

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...to be fired before those with the better education. As well as being better trained for their jobs, people with a college education have an easier time switching careers if their place of employment goes under.

The foreclosure crisis was not caused by one person, and alone one person cannot solve it. To minimize foreclosure, people need to work together and everyone must do their part. The government should cut down on wasteful spending, as should individuals. Just because the economy is down, does not mean people should let it bring them down with it. The citizens of United States must work together to protect themselves and help each other by avoiding irresponsible spending which leads to foreclosure, among other consequences. Foreclosure, in turn, harms the banks and those who use and operate them. Together we can solve the crisis, divided we fall victim to it.

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