Solutions for the Economically Troubled in the United States Essay

1170 Words5 Pages
With our economy in a downslide and increasing numbers of foreclosures worsening our economic problems, it is obvious that there needs to be some intervention in order to prevent more foreclosures. Home ownership has always been a key portion of the American economy and an integral part of the American dream. We cannot allow the current crisis to let more people lose their homes and become disenchanted about home buying in the future. Not only will the defaults on mortgages further destabilize the American economy now, but they will also cause problems in the years to come as less people decide to venture into home ownership again. Therefore, the obvious solution to these ill repercussions is by keeping people in the homes they…show more content…
This will be enough time, hopefully, for these homeowners to get their finances in order and resume paying their debts once again. As a mortgage payment is often one of the greatest debts of a household, the removal of this burden for six months will be a godsend to these troubled homeowners. In the meantime, banks will not be worried about their most troubled mortgages. They will be getting paid on nearly all their mortgages, either from responsible, financially secure homeowners who pay their debts on time every month, or from the government on the behalf of the troubled household. After the six months are over, there is a much higher probability that they will be paid on those troubled mortgages by the homeowners themselves, who have had six months to save thousands of dollars to pay towards their mortgages. As a result, the income of the banks will be much more secure, and they are more likely to lend out money to consumers. This will enable consumers to buy homes again--including some of the bank-owned properties that have been plaguing financial institutions for months. This cyclical effect will make the banks even more stable, and enable them to lend even more, helping out both consumers and financial institutions in turn. While this plan may seem like it has an enormous price tag for the federal government, its real cost will be much less than it may seem at the
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