preview

Solving the Foreclosure Crisis Essay

Good Essays
The foreclosure crisis was one of the harbingers of the coming economic recession. This was the issue that shifted the focus of the 2008 presidential election from the Iraq War to the economy. As one can imagine, many individuals and families are currently hurting as a result of this foreclosure crisis. High unemployment rates and lack of job creation leave very few options for already struggling homeowners. Because the housing industry composes such a large part of the American economy and affects so many Americans, it is necessary for the federal government to be directly involved in a solution to the foreclosure problem. Like the New Deal programs during the worst economic situation in history, the government must again be…show more content…
However, a recovery of the market will once again provide opportunity.
In addition to a foreclosure freeze, the government may have to bail out homeowners in danger of losing their homes in the same way it bailed out the banks and the financial sector. To do this, the government will have to set aside tens of billions of dollars in emergency foreclosure assistance and future mortgage payments. To assist low-income homeowners, the government should voluntarily make mortgage payments for up to five years. To assist high-income homeowners, the government should make no-interest loans available to them. This would provide a stabilizing revenue source for the housing industry. This assistance would apply to homeowners deemed by the government to be good investments. Those homeowners who would be able to or have shown the ability to pay for their homes prior to the economic downturn would apply.
The government bailout would be sort of like an investment in homeowners. Families that would be able to sustain mortgage payments in the future, as determined by the Federal Housing Authority, would qualify for government assistance to stay in their current homes. However, those who would never be able to pay the rest of the balance for their homes would be assisted in finding cheaper housing, possibly in the capacity of renting. This assistance would come in the form of grant money in order to obtain low income housing or rental property. This would be a
Get Access