How to Solve the Foreclosure Crisis

The government's attempt to stem the tide of foreclosures and arrest the incredible fall in home prices have been, in a word, pathetic. One proposal suggested was for banks to offer low 4% mortgages -- a step in the right direction. But in extending support to buyers of homes, it completely ignores the problems of millions of families that already have mortgages. As a result, it does little to halt the surge in foreclosures. With more home owners likely to default this year, the situation is far from recovery in spite of a wall street surge since March of this year. The new rates, and lower monthly payments, would be especially helpful for homeowners with negative equity (they owe more on their mortgages than their homes are worth). Such underwater borrowers, prime candidates for

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

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

It is evident that the housing deficit is just a layer of the many problems we are suffering from during the hard times in our economy. Foreclosure is indeed a horrific word that is haunting homeowners across the US. Because of the situation in the current economy, millions of Americans have been plagued by foreclosing on their homes and are left to find new location for themselves and their families to live.

“Most of the homes being abandoned and foreclosed will produce losses for the mortgage lender, which could add up to trillions of dollars and break the financial system before it is half repaired” (Zuckerman, 2008). These are the major reasons why the government should be thinking of a bailout for homeowners. If the government will not take action, then these losses will go past any bailout efforts of the government and it will be too late. By preventing foreclosures, it could bring a double benefit to the US economy and society. It would let families to stay in their homes and at the same time keep the housing market from getting out of control.

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

All the economy’s parts seem to be working together for a change: joblessness is under 5% - a 24 year low – yet inflation is holding steady at 3%, a combination that economists thought impossible” (Pooley). This article placed the economy in very favorable position, but the economy collapsed back in 2008 when Wall Street folded. In a video published by Johnathan Jarvis titled “The Cause and Effects of the 2008 Financial Crisis,” the video explains how the economy went from being healthy and vibrant, to desperate and helpless because investors were creating mortgages with people who were not financially stable, and those mortgagors were more than likely struggling to pay their debts prior to attaining a sub-prime mortgage loan. When these sub-prime mortgages defaulted, the house was reposed by the mortgagee and put on the market to sell. When the house went up for sale because of the default, the

without a home and in financial straits in the aftermath of the 2010 Foreclosure Crisis. However,

The same way that President Clinton boosted about 67.5% of all American people could become homeowners in 1995, will be the same amount of people that lose their homes potentially putting children out on the street and increasing the unemployed homeless population taking up residence in tent cities, where is the hope now? Now is the time to act and include benefits to all homeowners that still believe in the America Dream. The Government and the Banks need to provide modification programs to all homeowners to reduce their interest rates to 4.75% regardless of equity or loan to values. If these homeowners who are currently 200% loan to value, care enough to strive to make every payment timely but are in loans that are coming due or ready to adjust, the industry owes these homeowners the right to a loan that they can afford and maintain regardless of the economy. Each homeowner in America is surrounded by foreclosed properties or short sales affecting their value and impeding any ability to successfully sell their properties.

The main goal the government should be focusing on is to reduce homeowner’s monthly payments, by enticing lenders to make concessions in interest rates that will make their payment affordable. This plan can keep families in their homes and would decrease the number of foreclosures. Providing a financial rescue plan without requiring

I believe the best way to get out of our foreclosure crisis is to expand the pool of eligible buyers by changing the financing guidelines and increase funding for down-payment assistance. The American Dream has always been home ownership, and it will

The American homeowners have been forced to accept these adjustable rate loans in order to lower their monthly payment by a few hundred dollars. In the long-term, most end up refinancing down the line and losing all the money they saved monthly on additional closing costs, to modify an adjustable interest rate loan.

Let’s say you just signed the agreement to buy a house for 180,000 dollars. For a 30 year loan that comes out to a base price of a 500 dollar mortgage a month. The average mortgage rate in Michigan right now is 4.06%. That brings your mortgage up to 520.30 dollars. If you want to look at the U.S. rate it is at 3.9% which would put your monthly mortgage at 519.50 dollars. Now, after that same 3 year period in which you have been paying the base price plus interest you have only payed 730.80 dollars extra instead of the 10,800 previously. If you do the math on that it is less than 7% of the cost if you are paying on a mortgage rather than renting. Another benefit in Michigan (and many other states) is something called a homestead exemption which gives you a break on interest since you are making an attempt to establish a home.

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.

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.