Steps to Solving the Foreclosure Crisis and Preventing a Future Recurrence

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The foreclosure crisis is the worst seen by the United States in all of its history. The fact that thousands of people have lost their homes is a sobering thought. There are several reasons why foreclosures happen and they all point toward the mortgage companies, banks, the economy and the Federal Government. Still, finger pointing and blaming is not the solution. The time has come not only to fix the problem immediately, but also to provide safeguards to prevent it from happening again. This requires nothing less than a strong hand from the government. To solve the foreclosure crisis right now, the government needs to climb in the mortgage wagon and take the reins. Companies such as Countrywide and others took advantage of weak…show more content…
This includes drawing up a new contract for the mortgage that will reduce the mortgage payments to the new affordable levels and drop interest rates to make it possible. The payments may be a fraction of what they used to pay for their mortgage, but it is only going to be in effect for a maximum of 5 years. By this time, it is expected that the economy will recover and the homeowners will have steady jobs (this will be a requirement). At the end of the 5 years, the mortgage contract will become void and a new one will be drafted for the remaining amount owed for the house with the mortgage entity and based on the current laws, regulations and interest rates and other fees in effect at that time. The homeowners will then be allowed to opt out of the contract and move out of the house (they will lose it) and the bank can resell it to someone else at the going rate. The homeowners can sell the house during those 5 years but must pay back the government all the money that the government paid the mortgage company. This should take care of the existing foreclosure issue. Unfortunately, those who foreclosed past 6 months ago will not be helped with the program. But they will be given government housing in their area until they are fully employed for a year and are able to buy their own home or choose to rent, instead. If they cannot find work within a year, they can stay in the government housing until they do. But they must

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