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Solving The Foreclosure Crisis Essay

1052 words - 4 pages

The first step in solving the foreclosure crisis is to stop lending money that we cannot afford to pay back. Lenders are greedy and they just push people into loans that are too much for them to handle. Once the lending portion is under control then we must take care of the current problems, which are all the people that currently have the loans that they can’t afford.
Stop lending too much money! A person should be able to make the monthly mortgage payment with one and a half weeks to two weeks of paychecks. If it takes two and a half weeks or even 3 weeks of paycheck to make that mortgage payment then you cannot afford that mortgage. This is the kind of things that banks and lenders should be practicing. Banks and lenders need to first realize that the mortgage is not the only bill that we have. Yes it is the most important or should I say the most expensive but we have other bills and needs too. So if we put all our money in one pot we will eventually lose that pot and we then have nothing and that is when we go into foreclosure. So we must get a handle on the lending before we are able to attack the foreclosures. The banks and lenders are not all to blame we share some of that blame for accepting the loans that we could not afford. But it is very hard to say “I can’t afford this house” after the banks or lenders have said that you can. A lot of us were pushed into homes that were too much for us to handle because we were told that it’s no problem. Also interest only payments and balloon payments should not be legal. They only benefit the banks, the home owners always get into trouble with those types of loans.
We have many houses in foreclosure that can be prevented; one way is to have the banks be regulated with the interest rates. If the banks and lenders all agree to make a little less profit on the loans and adjust the interest rates and/or lower the amount of the loans to help people stay in their homes at an affordable rate then we would and could have less foreclosures on the market. On average it costs the banks $60,000 to foreclose on a house, if they take that $60,000 off the loan then the home owner will be able to keep their homes and the banks will still make money on the interest. Obviously the amount would change based on each individual loan, but you see the point, banks make a little less money, but the house does not go into foreclosure and have the possibility of losing even more money and we the people get to keep our homes. It sounds pretty logical that a bank would prefer to lose a little on the loan and keep the loan rather than lose the loan completely and have the potential to lose a lot of...

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