Making Home a Home: Solving the Foreclosure Crisis
Foreclosures have always been a fixture of America’s economic landscape. Unfortunately, the prevalence of foreclosures today has warranted the use of the word “crisis.” This crisis is not without its nuances, however; it is far from monolithic. While all foreclosures have the same result and usually involve sad families evicted from their homes, this crisis has had three distinct waves, each with its own (and sometimes overlapping) causes. As per the New York Times, the first wave was due to speculators and falling real estate prices; the second wave was due to risky mortgages, whose interest rates rose higher than the homeowners expected; and the third wave has been due to unemployed families unable to make their mortgage payments. Since the last wave is the current one and thus the one needing solutions, the third wave is the one I will focus most on.
In addition to being the most current, the third wave has the most potential to grow. The population of speculators and people who took out risky mortgages pales in comparison to the population of homeowners who have standard mortgages and depend on their work to keep up with payments. For these homeowners, any break in employment can force them to delay or even miss mortgage payments. Their foreclosures are the most unexpected. These homeowners were not looking to make a profit and took out prime mortgages. They have played by the rules and worked in order to have a home. In addition to reducing foreclosures, one of my goals in solving the foreclosure crisis is to keep these homeowners housed. Though the two goals seem similar, the policies I want to see set in motion will clarify the difference.
As mentioned earlier, homeowners caught by the third wave of foreclosures lose their homes because they lose their jobs. However, there has not been a spike of people suddenly becoming incompetent at their occupations; rather, a downturn in the economy has led to a break-out of unemployment. Improving the national economy would definitely stymie foreclosure rates, but that has a global and temporal aspect beyond the scope of my solutions. Instead, my proposal for an end to the foreclosure crisis will not try to improve the entire economy, but will mainly focus on more pinpointed solutions.
The crux of my proposal is to indefinitely suspend evicting the majority of homeowners. Doing so would keep families in their homes and would stop the growth of the foreclosure crisis, since this plan entails banks’ not taking over any property. While asking banks to pause foreclosures is an extreme solution, this is not meant to be a knee-jerk reaction. I do not want to trivialize the problem by implying that the solution depends solely on banks’ not taking action; that would be a superficial conclusion and unfair to the banks. Obviously there would be checks and balances in my plan, but the principal part is to let people stay in their...