How To Solve The Foreclosure Crisis In America

1989 words - 8 pages

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 only solving the foreclosure crisis in America, but also the crisis is dependent on ending the war in Afghanistan, finding a more energy efficient alternative for fuel, guarding our borders and protecting our homeland and making it possible to end government housing and food stamps as a way of living.
In order to solve the foreclosure crisis in America, the American public has to begin thinking differently and training themselves to live within their means. Each family needs to create a budget based off of actual income deducting expenses and managing any overages or shortages carefully. It is important to consider paying the mortgage first and then pay any other secured loans such as a car loan next followed by the payment of utilities. Grocery items and fuel for vehicles should be considered next. Payments on unsecured loans should then be considered. Entertainment and vacations should be the last expenditures listed on a budget. Tracking income and expenditures on a regular basis leads to success in achieving financial goals of saving and developing a diverse portfolio which will help meet needs in the event of unfortunate circumstances.
The bailout of the mortgage lending agencies such as Freddie Mac, Fannie Mae, Citibank and Bank of America should be avoided if possible. With that said, foreclosure on a home is never a good thing. The American taxpayer and the lending agency have to work together to create an agreement that both parties are able to uphold. If the taxpayer is unable to make the monthly mortgage payment, the mortgage company and the homeowner should plan a meeting to discuss the reasons for the nonpayment. If there are special circumstances such as the nonpayment of the mortgage due to the high cost of medical bills, the loss of employment, the loss of the home by natural causes or other specific reasons, the homeowner should be given more than one option that best suits his or her needs. One of the options that should be offered is a continuation of paying the interest only against the existing mortgage loan. Homeowners should be given the option of refinancing their home over a longer period of time with a lower interest rate and a small fee for closing costs. The lower...

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