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Solution To The Foreclosure Crisis Essay

1131 words - 5 pages

My family has been severely hit by the foreclosure crisis. My mother lost her home in 2005 and my father is having problems paying his monthly mortgage and almost went into foreclosure last month. The foreclosure crisis is not just something you see on T.V.; it has invaded our private lives. What I find most disturbing is the massive amount of bailout funds that were given to big companies that were about to go bankrupt. Billions of dollars were spent to save a few companies. There is a severe problem with how we are dealing with this budget crisis because it is not helping families across the country since more are losing their houses. We have a new president, yet the crisis still persists. Since Wall Street seems like it is improving as shown on CNN and FoxNews, it seems the nation is focusing less on the families who have lost their homes.

I believe that if we must rely on our government to relinquish the crisis, then we must hold them accountable and we as citizens must hold each other accountable. Therefore my solution has three tiers: government action, lender action and citizen action.

Government action: At this point, it seems that the bailout money is long gone and asking for it back from these companies would be pointless. Therefore, the federal government needs to pass several law/bills through Congress. The first bill would be to charge a large interest rate on the bailout funds given to the major corporations. So if Goldman Sachs was given one billion in funds, then they should be taxed 15% annually. If they cannot pay this 15% additional tax, then they need to go bankrupt and all assets given to the federal government for sale. If they pay the 15% tax, then this would generate revenue every year. This revenue should go directly to reducing the mortgage of homeowners who are in the first stages of foreclosure. The government would receive this money in the form of a tax. There would be an appointed committee with oversight over this money. This money would be given directly to lenders with the rule that it must be given to the most urgently needed homeowners. So if Bank of America has 5,000 homeowners in the first stage of foreclosure status, these funds would then go to rework their mortgage loan. The funds would be monitored by the appointed committee to ensure that there is no bias or favoritism in choosing families to help and funds are distributed not equally but most equitably among families.

Since the revenue generated from this bill would not be sufficient on its own, the government would have to pass a second bill that basically states that in the time of war, companies (Haliburton, etc.) that are making profits higher than their average profits during peace time must give that profit to the federal government to be distributed to families hit by the foreclosure crisis. A third congressional bill could be passed that taxes healthcare and pharmaceutical companies based on the median income of...

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