A Brief Note On Solving The Foreclosure Crisis

2229 Words Dec 5th, 2014 9 Pages
How to Solve the Foreclosure Crisis

Since 2008 the United States has witnessed the dramatic collapse of the housing market. The housing bubble spurred by the loans that the banks gave to people, who could not afford those loans, and the interest rates on the loans, was changing each payment without reason. People started taking more loans, paying high interest, stopped saving. That affected the value of the homes. The rapid increase in the value of homes across the country for the previous decade, had been a falsity, in which billions of dollars funded by investments and home purchases were lost within a few months (Wikipedia.org: United States housing bubble). Millions of home owners were found to be unable to pay their mortgages, leading to hundreds of thousands of foreclosures. These foreclosures not only led to the decrease in value of the foreclosed homes, but also decreased the value of the homes in the neighborhoods, complexes and cul-de-sacs around them (zillow.com). The billion dollar industry created by the fruitful housing enterprise, suffered huge losses, mainly by the lending companies that took on too many of the bad mortgage loans made by the banks. The ultimate collapse of the worldwide economy was only stopped by the government bailout of the major lending firms, who, through the huge amounts of foreclosures had found themselves out of money and in possession of thousands of devalued homes. Today, the repercussions of the collapse of the housing market are…

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