Solving the Foreclosure Crisis Caused by Slated-Income Loans

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

An alternative would be for lenders to add a true customer service department which is not based on pay or get out, but is counseling based to keep Americans in the American Dream of home ownership. This would not only keep their customers for future business with new home loans, but would be noticed by neighbors and the community who are appreciative their home values are not decreasing. The lenders would counsel them through the sale by assisting them with getting the most they can for their home. By getting local community organizations involved to help with home repairs and curb appeal. Once the home is market ready and a dollar amount has been reached for these repairs the home owner will have to volunteer time and/or resources to assist another person going through the same situation. This would not only help the homeowner but will keep homes in the area selling at a fair market value and not bring down the values in their neighborhood. The assistance provided by the lenders and assistance from the community will help build their self confidence and make them feel like they are not alone.

“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

The foreclosure crisis that took over the United States a few years ago left many people facing economic hardships. This crisis happened because there was a huge housing bubble that was unsupported by actual home values. The bubble began bursting in spring of 2008 and the crisis culminated in mid-2009. Many lenders went out of business and many home owners began losing their homes. When the government became aware of this problem and began to implement new programs, it was already too late for many homeowners. Those homeowners are not at a point where they might be considering buying a new home. The housing crisis has created new rules, regulations governing the mortgage industry, and has also created a new agency dedicated to consumer protection. This consumer protection agency is called the Consumer Finance Protection Bureau. These dramatic changes have helped to create more responsible lending. The improving market conditions such as low housing costs and competitive interest rates are allowing those affected by a foreclosure to become homeowners again. Prospective buyers have a multitude of programs available to them, so even those with less than clean slate have several options.

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

The insolvency seen in the Housing Market manifested in the large number of stagnant foreclosures caused a dramatic decline in housing prices, which resulted in many homeowners owing more money on their houses than they are worth. Market-level insolvency is caused by capital flight in a specific market in response to a scare during a decrease in solvency. During the scope of this recession, the initial, progressive decrease in solvency was caused by a negative Net Capital Outflow in conjunction with the cash-vacuum produced by the US Budget Deficit, and the scare was caused primarily by the failure of several significantly-sized corporations and a rapid increase in foreclosures caused by the loss of a large number of jobs.

This way the government could stabilize the market and only the houses at the top would be left unoccupied. These top tier homes could be offered for sale or for rent if a sale is not possible. A new loan could be made for the trade down, but the members of the family would be required to take a class on how to save and create financial goals.

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 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

Banks now offer programs to help homeowners/homebuyers, but many times, these loans are often hard to obtain. The current programs have more stringent requirements that are unreasonable for distressed homeowners. In my opinion, the only way to rectify the foreclosure issue is to make a substantial change in how potential homebuyers and homeowners obtain loans.

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.

The United States economy is in trouble and the housing market is suffering in a way we have not seen since the great depression. There are many home owners who are having trouble with their mortgage payments, and therefore they have fallen into foreclosure. Additionally, housing prices have gone down, and therefore the amount outstanding on many mortgages is greater than the value of the home underlying the mortgage. I think the goal of the banks and the US government should be to keep people in their homes. If the banks continue to foreclose at such an alarming rate they will end up owning too many houses and in trying to sell them continue to place pressure on the housing market thereby making it even harder for the economy to

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.