Foreclosed homes have become a menacing commonality in nearly every neighborhood in the United States. These foreclosed properties problems range from unkempt yards, broken doors and windows, as well as becoming dangerous havens for drugs and violent acts of vandalism. In addition, empty foreclosed homes drive down property values of surrounding homes and neighborhoods.
Many of these homes became foreclosures because the buyers could not afford the payments. This inadvertently ruins not only their credit scores, but also ruins the chance of owning a home in the future. This results in crushing families hopes of achieving the American dream of home ownership.
The flip side of this crisis is the affect that these foreclosures are
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This essay will describe these components in detail to show how they can be the key to solving the foreclosure crisis in America.
Component One
The first component of the solution is addressing the banks’ “toxic assets” that were created by the mortgage banks lending on overvalued property and lending to consumers that could not afford the payments. Underwriters should have prevented more of this; however that was not the case. In the future, banks and lenders will need to be more effective in the approval process that qualifies home buyers. The banks will have the option to participate in this program or not. They will also have the chance to pick and choose which properties will be included, if any.
As a result, the banks will need to take a marginal loss initially so they can recover most of the invested capital. All “toxic assets” will need to be reappraised at the bank’s expense so that the true value of the property can be reestablished. Once they have been reappraised these properties are unloaded by the banks for seventy percent of their current value which will recoup an acceptable amount of capital return to the banks. Taking advantage of this program would allow the banks to recapitalize themselves rather than receiving Troubled Asset Relief Program (TARP) loans that need to be repaid. (H.R. 1424, 2008) This also frees them of the “toxic assets” and improves their overall profitability and bottom line. Once these assets
Seeing other people reactions towards foreclosure helps me to develop a meaningful value of life and how to appreciate it everyday of my life. As I see what is going on around me I came up with three plans that can be executed to help all people who are dealing with foreclosure issues. This can become a major factor for the economy. One is called Own A Home , Financially Fit, and Bills To Kill. These are guaranteed plans that will help any individual that feels that they are not financially secured to become a homeowner. The Own A Home program is designed for aspiring homeowner in which they
There is by no means a simple solution to solving the home foreclosure epidemic but there are many changes that can be made to help Americans across the globe. The first, I believe starts
The current financial crisis, which had its roots from subprime mortgage crisis, began to increase dramatically in September of 2008. There have been significant economic disorders in United States alone. Major banks and financial organizations around the world are going bankrupt and writing down billion dollars. Housing markets are falling not just in United States but all around the world. This crisis is truly global and it is spreading like fire. Because of these economic crises, the US Congress came up with a $700 billion bailout plan to buy troubled assets from financial institutions who are struggling financially. Nevertheless, another bailout was proposed and it's the homeowner bailout. It is known that the foreclosure
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
For the last several years, the one issue that has been bringing the United States into a state of trouble that it has not been seen since the great depression has been the monstrous Foreclosure problem. Thousands of people have lost their houses. Thousands of people have faced the dangers of debt and chaos. Thousands of people lives have been ruined because of the mistakes that Americans have done in this nation. In order to solve the problem, one must take a look at how it started and how this depression began. Around eight-nine years ago, the market in housing caused many people to chase after it. This caused a mistake of creating a domino affect that has hurt banks from lending out the high amount of money to people and finding out
Foreclosure has become an outbreak affecting the entire United States of America. Realtytrac just reported in the month of April 2011 that one in every 593 housing units received a foreclosure filing. (N1) That statistic is for just one month! Some states such as Arizona, California, Florida, Michigan and Nevada continue to be plagued with an influx of homes falling victim to foreclosure or some other form of default. Each home that is a casualty to a foreclosure, short sale or even bankruptcy was collateral for the lender holding the promissory note. The consequences tend to come at a cost for the lender selling the property but a deal for the buying investor. The costs incurred and the losses experienced by the
I often used to watch a show called “Extreme Makeover” where a team of builders would come to a neighborhood, build a need worthy family a beautiful new home, and then just give it to them. “Wow! What a lucky family,” I would say. “How fortunate.” However, as time went by, that same family would be in the news again. Why? The house was in foreclosure. The people had gone to the bank and taken out a mortgage against the home, then spent all the money they got for it on other things.
The foreclosure crisis in America can only be resolved by every American citizen working together to build a stronger America by changing the way we make decisions for expenditures in our lives. We must stop overextending ourselves beyond our economic means. The foreclosure crisis of America has been caused by Americans borrowing money to purchase a home that they cannot afford. Lending agencies have allowed Americans to borrow more money to buy a home than they can afford. Each lending agency seemingly used logical reasoning that if they did not lend the funds to the homeowners, another agency would. The foreclosure crisis was caused by homeowners, businesses, banks, and even the government. The economic recovery depends on not
The foreclosure crisis in America has impacted everyone- even those who don’t own homes. Our nation is currently struggling with high unemployment, a relatively illiquid credit market, and a deficit that raises serious concerns about the value of the US Dollar in the not too distant future. With interest rates already at historic lows and the government pursuing an unprecedented policy of quantitative monetary easing, options for government intervention are limited. While there is no simple solution to this problem, I think that we must look at the reasons the housing market went into crisis, and based on that develop a regulatory system that will allow us to avoid another situation like this in the future. If Americans believe
The foreclosure crisis in Cleveland has imposed significant financial burdens upon taxpayers and area residents who have been forced to shoulder burdens that are rightfully the responsibility of borrowers, mortgage lenders and others that are direct parties to the mortgage transaction. Indeed, “the failure of borrowers and lenders
Brooklyn, NY – December 30, 2009 Foreclosures continue to rise drastically across the United States due to the recession, and have effected, and continue to affect thousands of families and individuals every day. One aspect we must take into consideration is that most people are not informed of what foreclosure means, or the process, even those who are homeowners. I believe that one step to preventing foreclosure is to educate first-time homebuyers. In addition, first-time homebuyer programs should not only assist potential buyers with financially preparing them to buy a home, but to keep the home once
In cities across the United States, the ongoing foreclosure crisis has caused the rapid spread of urban blight. The proliferation of foreclosed properties has consequences far beyond the hardships encountered by families facing foreclosure. Rising crime, unstable neighborhoods, and local budget problems are but a few of the external effects created by an overabundance of foreclosed property. Dealing with such property requires a two-faceted approach by local governments that focuses on acquiring abandoned properties and then creating programs to encourage responsible homeownership. Of particular importance are the concepts of land banking, which helps to consolidate land for reuse, and shared equity housing, which keeps housing
The economic crisis that has occurred in the recent years and that has consistently worsened over past year or so has led to many other problems, one of which is the foreclosure crisis. More and more people are losing their homes due to job loss or simply poor financial choices. The number of unemployed and homeless is increasing at an alarming rate. Many feel like there is nothing that can be done to remedy the situation, especially when the enormous debt that the United States has already accumulated is considered. There is not just one simple step that can be taken to fix this serious problem, but there are a series of things that the government and financial agencies can do to help gradually improve the situation, including more
One way to solve the foreclosure crisis is to actually foreclose on every homeowner’s home loan, including the homeowners in bankruptcy, pre-foreclosure and post-foreclosure. The credit report of these homeowners should read as a recession in 2009 and it should not lower their credit scores. The banks should then match the previous interest rates to the interest rates of today and appraise each home and property at the value that it was assigned by its local tax assessor.
The United States economy has been in trouble for the past couple of years. The foreclosure crisis is a condition that began due to the inability of homeowners to pay their mortgages. Foreclosure is a legal proceeding whereby a lender obtains a legal termination of a debtor’s right to redemption. The foreclosure rates have been increasing for a considerable period and certain steps have been put into place to solve the problem. While the government, financial institutions and the general public are highly aware of the crisis, the steps taken to combat the problem are still not sufficient as the foreclosure rates are still increasing.