Foreclosures An Undesireable Mess Essay

1787 words - 7 pages

Foreclosures an Undesireable Mess

Due to the recession that is currently taking place in the global arena today, the United States has concurrently become affected by a foreclosure crisis. In order to fix the economy and prevent future recessions, the United States must develop a plan to regulate foreclosures. To decrease the amount of foreclosures the United States has by providing financial support to homeowners. The Obama administration must persuade banks to provide assistance to families that are unable to fully meet their mortgage expectations. This may sound simple enough but foreclosure rates have gone up significantly in 2009. The government must also provide assistance to homeowners. Families have to leave their homes because they are unable to pay. They end up losing everything they’ve worked for and it just widens the gap between the rich and poor in the United States. It’s a sad cycle and the only ones left winning are those that are unaffected by the recession.
The recession has caused poverty to run rampant in communities throughout the nation. More than 2.6 million Americans now struggle to provide food for their families. “A new comprehensive economic survey shows that the recession has plunged 2.6 million more Americans into poverty, wiped out the household income gains of an entire decade and pushed the number of people without health insurance up to 46.3 million.”(Fleisher) Because of this increase in poverty, more Americans have been unable to afford to pay for their homes, thus resulting in foreclosures. Foreclosures have increased significantly. Just in the first six months of 2009, U.S. foreclosures rose 15 percent, affecting more than 1.5 million homes. (Fleisher) The Obama administration has already targeted the issue as a natural consequence of the recession and thus Obama has already tried to find a way to handle the situation, but his efforts have been in vain thus far. “The Obama administrations original plan was to persuade the lending industry to hand out $50 billion in subsidies.”(Fleisher) But so far the amount of homes being foreclosed has continued to rise. “Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up to nearly 5 percent from May, RealtyTrac said.”(Fleisher) The amount of foreclosures in a given area also affects the value of homes surrounding the foreclosed homes. Areas where foreclosures have increased have shown that real estate value decreases. For example, Greeley, Colorado, the city and state that I live in has experienced this phenomenon. It’s happened to my parents personally. Foreclosures around our house have increased and now our house is valued less than what the mortgage is worth. It’s discouraging to think about and it puts homeowners in an interesting situation because they have to pay more for a house that isn’t worth as much. This isn’t how it should be. The government should regulate banks in order to adapt to situations like...

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