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Solving The Foreclosure Crisis Essay

1028 words - 4 pages

The United States is currently under the hair wrenching burden of a recession in our economy. The past couple of years have been extremely hard on consumers as well as businesses in a way that some people are beginning to compare to the Great Depression of the 1930’s. One area of great hardship is real estate, and homeowners everywhere are in fear of losing their beloved homes. Where many are so accustomed to calling their ‘safe haven’ or ‘home sweet home’ is now becoming a nest of frustration, depression and financial incapability. Americans all over the country are finding themselves unable to make payments for their homes and are therefore losing them and being thrown out onto the streets. Many ideas to solve this crisis have been passed around Congress and the Oval Office but none have stuck (or have worked in that case). If someone does not come up with a sound idea and quickly then this crisis will continue to build and build until no one can afford their homes (not even the people running the banks and other financial institutions who give out the loans to help pay for them). I believe I have found a reasonable plan of action to strike this recession hard and hopefully break through it for the real estate aspect of the economy. If our nation’s banks and other financial institutions were more consumer friendly and less consumed in their avarice, we could possibly solve this national problem within the next several years, also helping strengthen the economy as a whole and returning the United States to its wonderful and flourishing power it once possessed.
Have you found yourself or someone close to you in need of financial aid to keep your, his or her home? Does it seem to you that banks and other financial institutions are more worried about making money now and paying themselves enormous bonuses than helping the average citizen and their families keep their residence? This seems to be a reoccurring problem in the United States’ real estate economy. A high amount of loans granted out by banks and other financial institutions on homes happen to be variable interest rate loans. The interest on loans is expected to increase over time and rarely ever decreases, therefore, people may be able to pay their monthly rate one month and the next find themselves unable to come up with the money. This situation begins the snowball effect which most likely ends in foreclosures on homes. Money is made off of the interest rate no matter what that percentage is on the loan. My proposition is that banks and other financial institutions begin to lean more towards fixed interest rate loans. Loans would not be granted in the first place if an individual could not pay the monthly amount. Therefore, if the monthly amount would stay the same then the individual could continue his or her payments and the bank or other financial institution would continue to receive its...

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