Essay on Solving the Foreclosure Crisis

998 Words 4 Pages
The American Dream promises us prosperity for all people. As children, we are told to own a home with a spouse, 2.5 kids, and a dog. This symbolizes social and economical status. However, with the recent economy down spirals, unemployment reports are almost being overshadowed by reports of foreclosures, while sweeping our so called “American Dreams” and ownership privileges right out of our front doors. It seems that in a crisis no one person wants to take the blame for the other. The government is blaming the lenders, the lenders are blaming the borrowers, and the borrowers are blaming both the government and the lenders. The truth of the matter is the blame is not encouraging a resolution. The solution to a crisis of this …show more content…
So the number one duty on the list of a homeowner when he or she is experiencing hardship should be calling their lenders and negotiating or requesting a loan modification. These modifications typically were reserved for borrowers whose mortgages became delinquent because of job losses, divorce proceedings, or illness. Yet, today is a new era, modifications are being offered to individuals suffering in the result of rate mortgages increasing. Loan modifications will allow the homeowner to find a more affordable mortgage payment for his or her financial need, and will help them remain in their residency and instead of looking for a new loan, buyers will be able to modify the terms of an existing loan. If the homeowner does not feel that this financial hardship will last an extended amount of time he or she is able to request forbearance or a postponement of payments for a couple of months are available.
Why this solution works? Well, because it benefits both the borrower, and the lender. The homeowner receives a small break in his or her finances, while the bank does not have to worry about the buyer defaulting on the entire mortgage and enduring foreclosure procedures. However, the lenders need to do their part. Until recently, loan modifications were the banks best kept secret. Homeowners were not aware of the criteria banks were using to evaluate loan modifications for approval. During this process, the lenders will negotiate

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