This website uses cookies to ensure you have the best experience. Learn more

Solutions To The Foreclosure Crisis: Refinancing

1056 words - 4 pages

Because homeownership is central to a family’s security, well-being, and long-term asset accumulation, the foreclosure crisis must be attacked aggressively by Federal and state governments. Critics of stimulus spending argue that the worst of this crisis is over, but many trustworthy indicators suggest that foreclosure rates will not return to pre-crisis levels for several years. In order to slow foreclosure rates and begin to repair affected communities, steps must be taken both to prevent existing homeowners from facing foreclosure and to prevent lenders from issuing mortgages that are beyond the ability of the borrower to repay. Although the latter step of increasing regulations regarding predatory lending in the future is beyond the scope of this proposal, it is absolutely essential. Without changes in mortgage lending, any positive steps taken to protect current homeowners will be negated.
Two primary methods must be used to help borrowers who are currently in danger of losing their homes. First, refinancing opportunities must be increased, particularly for families who were coerced into borrowing at sub-prime rates. This is a policy area that has already been addressed, but more must be done. Many of the programs previously implemented by state legislatures have used rigid standards of refinancing without regard to the individual’s specific needs. In some cases, this has caused homeowners to spend more money than they would have lost in a foreclosure! As of November 2009, Maine is the only state requiring loan servicers to produce individual calculations. Their groundbreaking legislation must be implemented nationally in order to benefit homeowners elsewhere. Second, borrowers who have lost their jobs and cannot benefit from refinancing alone must have an additional option, especially in cities and neighborhoods that have been practically obliterated by the crisis.
Although the crisis has affected every state and region of the United States, certain areas have suffered disproportionately. Sunbelt areas such as Nevada, California, and Florida experienced housing bubbles that popped as the economy declined. Many borrowers suddenly held mortgages that were worth more than the value of their homes, leaving them unable to sell the home to pay off their debts in case of job loss. Older industrial centers such as Buffalo, Cleveland, and especially Detroit have suffered acutely as well, since the manufacturing jobs they depend upon have increased their flight to cheaper labor markets abroad. This has caused whole neighborhoods to implode as entire blocks are vacated. We desperately need a solution that can protect our neighborhoods and preserve our cities from complete obliteration. I propose that the Federal government create a program that specifically targets homeowners in the hardest hit neighborhoods.
In order to qualify for this program, borrowers must meet two conditions: they must have lost their job in the past 18 months and they...

Find Another Essay On Solutions to the Foreclosure Crisis: Refinancing

Solutions to the Foreclosure Crisis and Beyond

1326 words - 5 pages Solutions to the Foreclosure Crisis and Beyond “Ster•il•ize : to deprive of the power of reproducing, as in surgically sterilizing cats and dogs.” Such is the definition of this word as listed in Webster’s Dictionary.(1) In looking at all the havoc the financial wizards of Wall Street have laid upon the global economy, it seems appropriate to review this term. Our society has been overcome with notion of “excess” in the past few years

Proposed Solutions to the Foreclosure Crisis

1047 words - 4 pages Foreclosure is a growing national disaster in the United States. Every time you tune in to your local news, there is a new family whose house is being foreclosed. Every time you ride around the neighborhood, there is another house up for sale. There are several solutions to this increasing trend including cutting government spending and cutting funds towards unsuccessful government programs, devising financial plans to assist families by setting

Proposed Solutions to the Foreclosure Crisis in America

1815 words - 7 pages Foreclosure, the process of claiming the defaulted property to cover the cost of an unpaid debt, has hit America like a tidal wave. Considered to be a crisis and a major factor in the poor economic situation of today, there is no doubt that the current state of the housing market and the influx in foreclosures across the nation has had a dire impact on the American economy since the beginning of 2007. Strategies, policies, action plans, and

Solving The Foreclosure Crisis: Two Solutions

1416 words - 6 pages truly getting a grasp of his financial capacity. However, is it fair to put all the blame on average Joe who has no idea about how important the issue of buying a home is? This question is relevant especially since lenders make it seem so simple in order to trap Joe and make a quick buck, without being aware of how they affect the market. The Solution To solve the foreclosure crisis, two processes must be put into action: one to counteract the

Causes of the Foreclosure Crisis and Possible Solutions

1345 words - 5 pages In addressing the national foreclosure crisis that which we are currently enduring, we must first acknowledge the reason(s) this crisis derived in the first place. In May of 1998, a Washington Post article cites: “Over objections of other financial regulators, [Greenspan, [Rubin and Levitt]] question[ed] sic whether unregulated derivatives contracts should get government oversight like exchange-traded futures contracts do.” 1 It is an economic

Solution To The Foreclosure Crisis

1544 words - 6 pages The solution to the foreclosure crisis requires cooperation among the borrower, the mortgage lender, and the federal government. Current proposals by President Obama’s administration call for federal government intervention through interest rate subsidies for refinancing stressed mortgages, guarantees of mortgage-backed securities buyouts, and funding to fill gaps in reduced monthly payments as an incentive for lenders to work with borrowers in

Solution To The Foreclosure Crisis

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

The Solutions to Climate Crisis

860 words - 4 pages   As we human beings have entered the Anthropocene, a new geological epoch dominated by humanity. The relentless pressure we have put on our planet has increased daily at a speedy pace, which has resulted in an unprecedented destabilization of climate change. What’s worse, our disagreement with climate change has left the planet in an even more dangerous crisis. The economic imbalance between the developed countries and the developing countries

How To Solve The Foreclosure Crisis

1407 words - 6 pages anything, these programs seem to fall short. In fact, I read that the bank that holds our mortgage helps a very small percentage of their customers who face foreclosure with refinancing available under these programs. I think being part of the foreclosure statistics makes me better able to see the problem from the inside and, thus, suggest real world solutions to the question of how to solve the foreclosure crisis. First of all, I would create a

How to Solve the Foreclosure Crisis

1308 words - 5 pages How to Solve the Foreclosure Crisis Imagine a young couple was married and bought a house together. They were happy they made an investment together that they would never regret. A few years later, the company the husband worked for suffered critically by the recession and he was one of the hundreds of people who got their job cut. They now have two babies to feed and have to choose between food and the mortgage. They soon began to miss

How to Solve the Foreclosure Crisis

1761 words - 7 pages How to Solve the Foreclosure Crisis The answer to the foreclosure crisis is simple. Make sure all homeowners for the affected properties are qualified and can afford their mortgage payments. The solution is much more difficult. There is no simple solution to cover all the complexities of the foreclosure crisis, but by adhering to the basics, long-term solutions will be realized. The best answer is to allow responsible people to manage the

Similar Essays

Solutions To The Foreclosure Crisis Essay

1004 words - 4 pages The foreclosure crisis is tearing away at this economy causing people to loose their house and be in national debt for long amounts of their life times. More people are filing bankrupt because they can’t afford to pay the adjustable interest rates that they set when signing loans for their houses. Now the economy is at a vast down turn, slowly turning up to becoming better internally, but still people are homeless due to their homes being

Solutions To The Foreclosure Crisis Essay

1111 words - 4 pages Federal Deposit Insurance Corporation, houses stopped selling, people were laid off in the financial industry, the stock market deteriorated, and realtors were not making any commissions because home sales stopped dead in their tracks. Worst of all people searching for The American Dream are facing foreclosure. I think that we need to get back to basics as far as the mortgage crisis is concerned. During the last 15-20 years there have been too

Possible Solutions To The Foreclosure Crisis

1209 words - 5 pages The purpose of this writing is to analyze the foreclosure crisis and offer some solutions to keep people in their homes and satisfy the financial accounting records of the banking industry. With more lost jobs on the horizon and fluctuating adjustable mortgage rates, the foreclosure crisis continues to plague America. A recent report from the Mortgage Bankers Association reveals that 14% of loans are behind or in foreclosure. This is

Solutions To The Foreclosure Crisis In Cleveland

1572 words - 6 pages to highly foreclosure-prone borrowers.” Economic conditions and predatory lending in Cleveland have hindered the city from being able to effectively respond to the crisis. However, Cleveland has been successful in its property acquisition tools for revitalization, namely its city land bank. The use of the city land bank has been a key element in the successful efforts of community development corporations (CDCs), but as economic conditions and