Scholarship Essay

1122 WordsJul 17, 20185 Pages
Scholarship Essay The foreclosure crisis is the second major financial dilemma of the twenty-first century. To solve this, the roots of the problem need to be dug up and exposed followed by replanting with an appropriately improved regulatory system to help build stronger roots for the future. It seems that the free market system can't be free anymore given its intertwining roots extend way beyond domestic to international financial systems. There are two fundamental causes to the latest credit crisis: 1) poor quality securitized mortgages and 2) insufficient underwriting for credit poor borrowers. Secondary (downstream) problems making the financial crisis more complex include underemployment and business failures. Many banks,…show more content…
Republicans are the pioneers of fiscal conservatism in government, and desire above all else a free market even with the enormous risk of financial collapse. The country already is in increasing debt and the money needed to fix a free economy does not exist. And therein lies the problem: America has only been as successful as it has proven to be because of invention and innovation in technology and the structure of the economy itself. To restrict innovation would weaken the economy, but keeping it too open led to the current fiasco. Finding middle ground is the only way to go. America is not alone with this problem, it needs every country’s help to recuperate and rebuild. 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

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