How To Solve The Foreclosure Crisis: Local Lenders

1411 words - 6 pages

Several things have to happen to solve the Foreclosure Crisis that has been running rampant in our country.
Consumers need to take the loans back to the local lenders. We need to reenergize the local job markets. Penalties need to be put in place for companies that market and write subprime loans. A requirement needs to be implemented that forces future homeowners to take budgeting classes. Initiate severe penalties when a homeowner defaults on their loan obligation. Options need to be offered to homeowners currently trapped in an “underwater” mortgage. Consumer confidence needs to be restored and the bailout funds need to be revoked from the Freddie Mac and Fannie Mae corporations.

The first thing that needs to be done is localized loaning. The large corporations such as The Lending Tree need to localize their offices and staff. The local office would know the true value of a property and be involved in the community. Most insurance companies already have this practice in place; they can drive to a property to see the value, most insurance companies will refer you to their local representative for the simple fact he knows the community and real value of the property in question. This would also help stop the fraud from home appraisers who grossly overstate the value of a home. This would also keep the majority of the funds from mortgages in the community, not sent to Nevada or New York. This practice would also help stem fraud from repeat loans on the same property the local lenders could communicate to catch fraud earlier. Cases where fraud has been found the government needs to prosecute all parties involved. An example of this would be a property that has been purchased two of more times in a year and foreclosed within a year of the last purchase date. This may allow the government to recapture funds to offset the deficits.

Faith needs to be restored in the local job markets. There is need to increase American productivity and halt unfair trade agreements. We need to make American made products competitively priced with products made out of the country. This would require the implementation of a global minimum wage. NAFTA would be a more viable agreement if the wages from all countries were equalized. There would be a larger market for American products if the wages in foreign countries were comparable to the American counterparts. This would eliminate slave like labor in under developed countries. A return to local productivity will bring back consumer confidence and ultimately an increase in credit available through investments. Credit is currently impossible to get for the person who needs it. Americans need to get back to increasing their savings accounts and decreasing their expenses. There should be a substantial tax credit for anyone who pays “cash” for a primary residence. This would energize the purchase of houses that have been foreclosed on and neighborhoods that need to be revitalized. With no mortgage payments more...

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