This website uses cookies to ensure you have the best experience. Learn more

How To Solve The Foreclosure Crisis

1827 words - 7 pages

Solving the foreclosure crisis is a vital step toward the country’s economic recovery. The sooner America can resolve this crisis, the more rapidly banks will recover financially, home values will begin to rise once more and American citizens will return to work. The purpose of this essay is to provide a viable solution to the foreclosure pandemic. This proposal will benefit the homeowners, taxpayers, businesses, and the financial institutions in America. It will not benefit every household experiencing a financial hardship; however it will enable numerous American families to keep their homes. It will also aid in a more rapid economic recovery for America.

Why the HAMP program is failing

The Chicago Tribune dated December 11, 2009 reported that lending institutions are initially working with the HAMP program by accepting a temporary reduction in monthly payments, but only 38% of the trial modifications have become a permanent modification. The article explained that the lending institutions were bringing payments down drastically. One example I read of a lending institution’s failure to permanently modify the loan was a monthly mortgage payment going from $2,200 a month, down to $686 a month during the trial period of the modification process. After the trial period was over, and the homeowner had made every trial payment on time, she was still denied a permanent modification and was forced into foreclosure.

I believe the HAMP program, despite its wonderful intentions, is failing to reduce the foreclosure rate substantially. This, in my opinion, is due to the reluctance of the lending institutions to lose profits and/or potentially accept a loss on their investment by participating in this program. The HAMP program ultimately creates losses for the lending institutions by substantially decreasing, or eliminating altogether, expected profits from an original mortgage note. I believe the lenders are trying to take losses off their books as quickly as possible to maintain a relationship with their investors. Most financial institutions have a fiduciary responsibility to their investors to remain profitable. The HAMP program is forcing them to go against those responsibilities by substantially decreasing the lending institutions profits. This has a sever effect on the lending institution’s ability to lend money as the investor capital and profits decrease. The decrease of investor funds and profits within the financial institutions is a problem that has taken its toll on our American businesses because the financial resources are not available to continue lending money. This yields a terrible outcome for the American public by retaining weak employment and a slowing economic recovery. I believe this is why so many lenders would rather foreclose upon a property then modify a loan under this current plan.

The HAMP program is also increasing the future tax burdens of Americans. This leads to animosity toward the government and toward...

Find Another Essay On How To Solve The Foreclosure Crisis

How to Solve the Foreclosure Crisis

1699 words - 7 pages find ourselves in friendly debates of what we think it’s going to take to “fix” things. We can now see pretty clearly as to why we have a foreclosure crisis, but now the question is, how do we solve the foreclosure crisis and hopefully prevent this from happening again? I am 27 years old and I have been working in real estate for the last eight years. I didn’t enter into this business because I had a burning desire to sell real estate. Like

How To Solve The Foreclosure Crisis

1066 words - 4 pages Prompt: “How to solve the foreclosure crisis” America. The American dream. Born in 1776 and refined through these many years, every American citizen has certain inalienable rights. These rights are confined in the American Constitution and all the laws since. One great American dream is home ownership. What great solace in the ability to provide your family with the basic comfort of shelter; a home. After World War Two, the American

How to Solve the Foreclosure Crisis

1308 words - 5 pages How to Solve the Foreclosure Crisis Imagine a young couple was married and bought a house together. They were happy they made an investment together that they would never regret. A few years later, the company the husband worked for suffered critically by the recession and he was one of the hundreds of people who got their job cut. They now have two babies to feed and have to choose between food and the mortgage. They soon began to miss

How to Solve the Foreclosure Crisis

1405 words - 6 pages How to Solve the Foreclosure Crisis Foreclosure is when an individual loses their right to the ownership of their house to the bank that holds their mortgage. This usually occurs when the owner of the mortgaged property gets behind on their payments and the bank loses faith that they will receive their payment. In order for the bank to avoid further money losses, they repossess the house and then auction it off for no less than the money still

How to Solve the Foreclosure Crisis - 1027 words

1027 words - 4 pages Foreclosure has been a tragedy across America. One out of every two hundred homes will be foreclosed upon. That is approximately 3,000 people in Washington D.C. losing their homes every year. Also, every three months 250,000 new families enter into foreclosure. Things that we can do to solve this crisis are Educate Citizens, Banks need to lose the greed, and more job opportunities. For one the crisis started within the people. Citizens

How To Solve The Foreclosure Crisis

1572 words - 6 pages How to solve the foreclosure crisis. Solving the foreclosure crisis will depend on the contribution, and reward, of many stakeholders. In one neighborhood alone, West Oakland in the San Francisco Bay Area, there were almost three hundred foreclosures and short sales this year alone. This has had many ill effects: displaced residents, blighted neighborhoods, torn social structures, increased crime and further erosion of home values, all

HOW TO SOLVE THE FORECLOSURE CRISIS

1797 words - 7 pages HOW TO SOLVE THE FORECLOSURE CRISIS What do we think when we hear the word “foreclosure”? Most people realize that it’s definitely something that is not good, some say that it’s when someone fails to do something, but those people don’t really know the meaning of it. But before I present my idea let’s review the meaning of such process: From the website of InvestorWords.com foreclosure Definition The legal process by which an

How to Solve the Foreclosure Crisis - 1206 words

1206 words - 5 pages How to Solve the Foreclosure Crisis Over the past few years, the U.S government has proposed and put into effect many different ideas in hopes of at least slowing down the amount of Americans losing their homes within the U.S. during this recession but as a result, the amount of homes being foreclosed in America has continuously increased over the past few years. One bill that stood out the most was the bailout money given to hundreds of

How to Solve the Foreclosure Crisis - 1130 words

1130 words - 5 pages How to Solve the Foreclosure Crisis The foreclosure crisis in our country has implemented a domino effect that may take years before we note any positive changes. As the country begins to heal, an effective process and/or program must be implemented that will reduce or eliminate foreclosures. It is important to remember that purchasing and maintaining a home is a part of the “American Dream,” and when working class families cannot seem to

How to Solve the Foreclosure Crisis - 1104 words

1104 words - 4 pages How to Solve the Foreclosure Crisis An important step in solving the foreclosure crisis is to provide assistance to mortgagees in making the monthly loan payments; this assistance should be in place before the first loan payment is due. One solution in providing assistance, which would not require any additional governmental funds to be spent, would be a mandatory mortgage equity accelerator program for every new loan written. A mortgage

How to Solve the Foreclosure Crisis - 1761 words

1761 words - 7 pages How to Solve the Foreclosure Crisis The answer to the foreclosure crisis is simple. Make sure all homeowners for the affected properties are qualified and can afford their mortgage payments. The solution is much more difficult. There is no simple solution to cover all the complexities of the foreclosure crisis, but by adhering to the basics, long-term solutions will be realized. The best answer is to allow responsible people to manage the

Similar Essays

How To Solve The Foreclosure Crisis

1024 words - 4 pages then have a stable economy back in our grasp. Once we turn both of these ideas into actions, I believe that our nation can solve this crisis of foreclosure. We can pull through the hard times and make a better future for the upcoming generations. I feel that if we can make this happen, it will set a good example for those generations who are watching, like mine. If this happens then hopefully, in the future, we will know how to deal with issues like this one, or be able to avoid them completely. This will make for a superior and successful future for our nation.

How To Solve The Foreclosure Crisis 1359 Words

1359 words - 5 pages How to Solve the Foreclosure Crisis The subject of foreclosure is one that I know too well. I am currently trying to get my house out of foreclosure. It is not that I have not been in contact with Countrywide (now Bank of America), I have been in contact with them since July of 2008. I even signed a Modification Agreement in March of 2009. I thought that everything was okay. I sent all the paperwork in, signed and notarized, along with

How To Solve The Foreclosure Crisis

1407 words - 6 pages "How to Solve the Foreclosure Crisis" The foreclosure crisis in America isn’t something I just hear about on television or in my high school Economics class. It is something that my family and I have been living through for the last few years. It is not just a problem for banks and mortgage companies and politicians. It is a problem for real people like me. According to the Center for Responsible Lending, 2,400,000 foreclosures are

How To Solve The Foreclosure Crisis 1365 Words

1365 words - 5 pages How to Solve the Foreclosure Crisis Choices. This nation is faced with a number of choices that will shape the future of not only the United States, but also nations around the world. There are certain things that are essential to human nature. If your body hurts, you do everything within your power to help it heal. If your child is hungry, you do everything you can to provide food. If you are homeless, you do your best find a place to