How To Solve The Foreclosure Crisis

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 banks within the U.S. by President Obama and Congress totaling at an amount of almost $200 billion. This money was given to the banks in hopes of helping them to become lenders again so that they could help homeowners in need of the money to keep their homes. Despite doing this, it will take some time before we see any improvements from this bailout money, so as a result, America is basically back at step one which is how to solve the foreclosure crisis. After researching this situation, three proposals came to mind. For one, banks could reconstruct their mortgage loan interest rates to fit each family’s situation and secondly, twice a year, the U.S. government could tax each American citizen that is working, $.75 from their paycheck each year to help decrease the $11 trillion U.S. mortgage debt that we are in. Thirdly, banks all over the U.S. could lower their mortgage loan interest rates to a very low standard rate for not only people who want to buy homes but for people who already have homes.
In the first proposal, banks could possibly reconstruct their mortgage loan interest rates to fit each family’s situation. In this case, the mortgage loan interest rates would fluctuate from family to family. It will all depend on each family’s circumstances and what they are able to pay at this time during this recession. With this, families are still able to keep their homes and banks are still able to collect some money from each family for their homes. So basically, it’s a win for both sides. The family doesn’t have to lose their home and the bank doesn’t have to foreclose another home, which will have to be placed back on the market with little hopes of being sold anytime soon. To explain this situation further, suppose we have a family that before the recession could pay for their home. The husband was making about $80,000 a year and the wife, $30,000 a year. After the recession hits, the husband is laid off from his job and now the wife is the only one bringing in any income and as a result of this lay off, the wife is unable to pay for both the house and the rest of their bills. So now the family is faced with losing their home because they don’t have enough money to make the payments. To help this family out, the bank could reconstruct their mortgage loan interest rate to fit what this family can pay at this time to keep their home. Like it was stated earlier, the family has a chance at keeping their home and the bank still collects some money for the home and doesn’t have to worry about...

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