Essay on Solving the Foreclosure Crisis

Essay on Solving the Foreclosure Crisis

Length: 1179 words (3.4 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

The solving of this foreclosure crisis that is now plaguing our economy and our people involves examining the past, taking important steps in the present, and changing our policies and our thinking for the future. Perhaps the greatest cause of this incredible problem was our nation’s lack of foresight. The country did not dream that the values of houses and properties would decrease so drastically, and thus we treated the buying and selling of houses as something that was almost insured, stable, and guaranteed to continue to rise when it clearly is not. Many consumers were approved for mortgages with minimal proof of ability to pay it back. The government also bailed out failing banks after it became apparent that their current way of lending money was leading to crisis. This bail out meant that the banks were not forced to confront and fix their own mistakes.
Thus stated, we are now in a crisis, and must make some changes in our mortgage loan policies in order to help the people who cannot pay their monthly mortgages as well as the banks, who are forced to foreclose and sell the houses at a loss. There are three variables that affect a monthly mortgage payment: interest rate, principle, and term. The banks simply cannot lower the principle, because they would lose too much money for loans to be beneficial to their business. Lowering the interest rate, even to zero percent, would not significantly lower the monthly payment, and would also leave the bank making no money on the loan. Thus, the only viable option would be to lengthen the term. As of right now, there are fifteen-year, twenty-year, and thirty-year mortgage plans. I propose a new forty-year mortgage plan be created to increase the term of the loan and thus significant...


... middle of paper ...


...n support. Income is just as important as good credit when it comes to large loans. Not only do the banks have to tighten their qualifications for loan eligibility, but so do mortgage brokers. Brokers who have patrons that default on their mortgages should have their commissions rescinded by the banks. This would encourage brokers to be honest and forthright with their customers while using all information available to ensure the financial stability of the homebuyer. It may seem unfair that some people are ineligible to receive loans, but it is only realistic. It would be a bad business move for a bank to lend money to a person who cannot pay it back. On the other hand, it would also be a bad business decision for a person to get a loan they cannot pay back. Both banks and homebuyers need to be fully responsible for their borrowing and lending decisions.




Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Solving the Foreclosure Crisis Essay

- The foreclosure crisis is a very sensitive issue that needs to be acknowledged urgently. This particular issue has put a lot of people in danger by losing their homes. When being in a predicament like losing one’s home it is all about responsibilities. Once a person has been notified that their home is in the process of foreclosure and they only have but so little time to pay their mortgage, this is when compromising comes into action. It is imperative that needs come before wants when in a position of foreclosure....   [tags: Foreclosures, ]

Strong Essays
961 words (2.7 pages)

Essay on Solving the Foreclosure Crisis

- Solving the foreclosure crisis will not be an easy task. I believe there is no quick fix or sure solution to fix this far-reaching crisis. There are however, steps that every individual involved in the foreclosure crisis can take towards improving the situation. People that the foreclosure crisis does not directly affect should still rethink their lifestyles as well, so that the crisis does not continue to grow. The bail outs given to the banks were a candid approach to preventing the banks from failing, but there were still thousands of Americans failing as well....   [tags: Foreclosures, ]

Strong Essays
985 words (2.8 pages)

Solving the Foreclosure Crisis Essay

- The current foreclosure crisis that our nation is experiencing has become a great hardship on many people in America. People that have lost their jobs due to cut backs, people with families for whom they need to provide shelter, people who are otherwise very responsible but have been put in a position from which they cannot escape, these are the people that are suffering. Normally if one could not afford to make payments on their mortgage, there would be ways for them to refinance their mortgage in order to adjust some of the payments....   [tags: Foreclosures, ]

Strong Essays
960 words (2.7 pages)

Essay about Solving the Foreclosure Crisis

- The first step in solving the foreclosure crisis is to stop lending money that we cannot afford to pay back. Lenders are greedy and they just push people into loans that are too much for them to handle. Once the lending portion is under control then we must take care of the current problems, which are all the people that currently have the loans that they can’t afford. Stop lending too much money. A person should be able to make the monthly mortgage payment with one and a half weeks to two weeks of paychecks....   [tags: Foreclosures, ]

Strong Essays
902 words (2.6 pages)

Essay on Solving the Foreclosure Crisis

- The foreclosure crisis is completely out of control. Everywhere you go, there are foreclosed houses to your left and right. The only plans that there are for putting an end to this crisis have a very small picture of the crisis in mind. These plans only deal with helping people that are in an immediate danger of having their house foreclosed on. The help that they offer only puts people out of harms way until they have to make payments later. Many people simply can’t pay the bills that they have in front of them....   [tags: Foreclosures, ]

Strong Essays
945 words (2.7 pages)

Solving the Foreclosure Crisis Essays

- Throughout history Americans have experienced many different crises. Today, one of several crises that are affecting the United States is the foreclosure crisis. I believe Americans are experiencing the worst foreclosure crisis of all time. The foreclosure crisis has been brought on by numerous factors, such as the state of our economy, job loss, and taxes, not paying mortgages, and lastly, owing the IRS. December 2007 is when Americans started to face some tough times. Many people were losing jobs and being laid off....   [tags: Foreclosures,]

Strong Essays
1113 words (3.2 pages)

Essay on Solving the Foreclosure Crisis

- For many Americans, the foreclosure crisis was a news story on TV. For others, the crisis was a national problem to be pondered “in theory.” In my case, however, the foreclosure crisis was personal and real. In 2003, in the midst of closing my failing African American bookstore in Denver, I defaulted on my home mortgage – finding myself the target of a foreclosure process, but also of predatory lenders and investors prowling my inner-city, gentrifying neighborhood. I avoided foreclosure by agreeing to a modification plan with my bank....   [tags: Foreclosures,]

Strong Essays
2068 words (5.9 pages)

Solving the Foreclosure Crisis Essay example

- How do we solve the foreclosure crisis. This question has been plaguing many people who are smarter and better educated than I am. But to them this is just an academic question, since they have probably never faced the problem of which bills to pay or whether or not to go to the doctor or fill a monthly prescription or pay the mortgage. For a lot of Americans these are the choices that have to be made each paycheck. To solve the foreclosure crisis we must help these people to pay their bills and have enough money to continue paying their bills....   [tags: Foreclosures,]

Strong Essays
1034 words (3 pages)

Solving the Foreclosure Crisis Essay

- I have always been taught that education is the key top solving almost any problem. The current foreclosure crisis is not any different. There are many reasons cited as to why this crisis happened. Some reasons are obvious whereas other may require inside knowledge of the actual mortgage approval process of individual banks. Greed has been cited by many as the most obvious reason. Greed on the part of the banks, realtors, loan officers and yes even homeowners. Homeowners who wanted to get much more house than they could afford just because someone approved them for it....   [tags: Foreclosures,]

Strong Essays
1061 words (3 pages)

Solving the Foreclosure Crisis Essay

- The first measure of solving the foreclosure crisis is to first accept each consumer on a case-by-case basis and identify his or her current payment structure, debt to ratio and the ability to repay the new loan. The modification of an existing loan should be reviewed based on the rule of Credit, Capacity and Collateral. The three “C’s” are the first step in identifying if the consumer can repay the loan and the true value of the subject is truly supported. The second solutions to solve the crisis is the origination process, were specific steps should be audited to support each broker and loan officer to be assigned an Direct Endorsement Number for each loan they submit to uphold them for al...   [tags: Foreclosures, ]

Strong Essays
1124 words (3.2 pages)