Utilizing Resources of the Private Sector to Help Solve the Foreclosure Crisis

Utilizing Resources of the Private Sector to Help Solve the Foreclosure Crisis

Length: 1071 words (3.1 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

The ensuing foreclosure crisis is one of great complexity. The problem has been culminating for years; signs of a “real estate bubble” began to surface as early as 2006. Despite the warning signs, the American economy continued to function, convinced that the “bubble” was not real or that its effect would be minimal. The numerous parties involved also adds to the confusion. Consumers, consumer banks, and Wall Street firms all had a part in causing the crisis. Ultimately, the global economy entered a terrible recession. Unable to maintain their sub-prime loans, many Americans were evicted from their homes. Economists and government officials have searched for ways to subdue the problem, as it continues to plague the entire economy. Although some progress has been made, there is still a great deal that could be done to solve the problem.
A possible solution to the foreclosure crisis must be bipartisan and combine ideas that conform to different ideologies. The best way to solve the problem is to utilize the resources and abilities of the private sector. Although the government can be helpful, the businesses must be at the core of the solution. In any financial crisis, the private sector is at the center of the problem. Most of the problems experienced by the public sector result from difficulties in the private sector. If the challenges are derived from the private sector, then the solutions should be as well.
The first part of the solution includes tax incentives. Financial institutions should be given a tax deduction for each mortgage that it refinances. Banks will keep track of all loans that are refinanced. A report of all refinanced mortgages will be sent to a government auditor who will investigate each of ...


... middle of paper ...


... allows financial institutions to refinance sub-prime mortgages while receiving tax incentives. The government will have a regulatory role in the plan, as government auditors will ensure that the tax incentives are only given for legitimately refinanced loans. The plan will give consumers an opportunity to get an appropriate mortgage. As lending practices are improved, the housing market will gradually recover. Meanwhile, banks will have excellent opportunities to increase revenues, while investment firms will have many opportunities for increased returns, without excessive risk. Ultimately, improvements in the credit and housing markets will contribute to a stronger economy. The future of the global economy is highly dependent upon credit. Solving the foreclosure crisis will allow the financial sector to recover, prompting a recovery of the economy at large.

Need Writing Help?

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

Check your paper »

How To Solve The Foreclosure Crisis Essay

- The Foreclosure Crisis is alarming. I am concerned that upon completion of my college education in about 4-6 years we will still be faced with this problem. Not only that, but I fear that I will not be able to start and complete my education either at the same school or even a different school because my parents might loose their jobs. No one wants to be on the streets, no one wants to be without a job, no one wants to be in debt. Everyone is at fault. There is always a ripple effect when one piece of the formula is not intact....   [tags: Economics, Mortgage, Housing Crisis]

Strong Essays
939 words (2.7 pages)

Solving the Foreclosure Crisis: Problem of a People, Industry and Country

- Owning a home is the primary tenant of the American dream which intern is surrounded by the fabled white picket fence, is filled by the quite impossible two and a half children, and occasionally a dog. Now, through numerous faults in the management of the housing and financial markets by key players in the private and public sector as well as major policy deficiencies the country is embroiled in a predicament unlike anything seen for generations. A perfect storm of easy money, lack of oversight, and a massive infusion of new homes have left housing markets around the country filled with surplus homes and owners by the thousands either defaulting on loans or walking away from houses due to lo...   [tags: foreclosure, economy, financial]

Strong Essays
1371 words (3.9 pages)

A Practical Solution to the Foreclosure Crisis Essay

- It is no secret the foreclosure crisis has played a significant role in the financial meltdown of the past year. The collapse of the housing marketing has brought thousands of families across the country to financial ruin, forcing many out on the streets. Although the common consensus is that something must be done to stabilize the foreclosure crisis, the agreement ends there. Proposed solutions to the foreclosure crisis have drawn controversy from all political affiliations and walks of life. This controversy is largely due to the fact that no one can determine for certain, a single factor that led to the housing market meltdown....   [tags: foreclosures,]

Strong Essays
1133 words (3.2 pages)

How to Solve the Foreclosure Crisis Essay

- The foreclosure crisis has become as confounding as the old, neglected house on the corner of your street. With shattered windows and wild lawn, no one knows what to do with it, how to save it or even get rid of it. Public and private institutions have tried this and that to patch the ongoing economic blight: lowered interest rates, credit counseling, foreclosure workshops, short sales and bailouts. Nevertheless, the number of foreclosures has relentlessly continued its climb. This ascent has threatened the viability of entire neighborhoods and the value of most families’ largest and most important asset....   [tags: Foreclosures]

Strong Essays
2195 words (6.3 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)

Solving the Foreclosure Crisis Essay

- The foreclosure crisis is like a sore, festering, but treatable with the right financial remedy. Over the past couple of years, little has been done to prevent an economic downturn in the housing industry. With hard work, excellent financial planning, and most importantly, patience, the government and the housing industry will be able to overturn the rising foreclosure rates. The economic impact of the housing market has varied over the last several years. The housing bubble was created due to the increase in housing prices....   [tags: Foreclosures, ]

Strong Essays
1298 words (3.7 pages)

Solving the Foreclosure Crisis Essay

- 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. If the Federal Housing Authority (FHA) and the United States Treasury Department would implement some radical new programs to help the people affected by this crisis, not the companies responsible for it, the FHA could turn this crisis into an opportunity to help....   [tags: Foreclosures, ]

Strong Essays
1057 words (3 pages)

Essay on Solving the Foreclosure Crisis

- What is happening to the “American Dream”. Why are low and middle income people loosing their homes. All of us must ask ourselves these questions and look for a solution of this problem. Americans are loosing their homes at rapid rates. According to the CNBC.com Highest State Foreclosure Rates slideshow, the highest state foreclosure rates recorded in 2009 were in Nevada at the rate of one in every 119 households. Florida’s foreclosure rate was one in every 165 households and California’s one in every 180 households....   [tags: Foreclosures, ]

Strong Essays
1154 words (3.3 pages)

Solving the Foreclosure Crisis Essay

- Any plan to solve the foreclosure crisis must address two issues, at two different levels. At the bottom, the issue which must be addressed is how to protect consumers, that is, the homeowners who are the direct victims of the crisis and are in the process of losing their homes or are likely to lose them in the future. And at the top level, the issue which must be addressed is how to formulate and enforce adequate regulatory mechanisms such that the crisis does not occur in the future. The plan which would work best to solve the foreclosure crisis should be one which addresses both these issues simultaneously....   [tags: Foreclosures, ]

Strong Essays
1218 words (3.5 pages)

Essay Lack of Funds and the Foreclosure Crisis

- Experts and gawkers have often been referring our current situation as the worst housing crisis in decades and some modern day crystal ball gazers grimly predict that the worst only lies ahead. We are seeing thirty-somethings that once acted as though they had life gripped in the palms of their hands reduced to living in their cars and the predictable toppling of a financial empire that became too top heavy over a short period of time. The best questions to ask have nothing to do with who is at fault or what we, as a country, could have done to better protect ourselves from a tsunami of greed and irresponsibility....   [tags: foreclosures, economy, ]

Strong Essays
1343 words (3.8 pages)