The current foreclosure crisis in America is a very sad and disturbing situation. It is distressing to think of families across the United States of America in the process of losing their homes. As the leader of the free world, it is appalling to me that the president and his cabinet cannot develop a program that will assist families to stay in their houses or at least prevent them from being eradicated from their home sweet home. This is the reason why I have talked to my parents about an idea to prevent this from happening. My idea for the current foreclosure crisis is a simple one, but one that I think might have positive results. The main goal is to keep families from losing their homes.
My plan would be a delaying payment plan for mortgage payments. I will call this plan the “Keep America Covered” program. When a person loses their job, or when some family related situation develops that impacts their ability to make their house payments, “Keep America Covered” would kick in.
For the following parts, I received help from my parents since I did not completely understand the process of a home mortgage. This is how the “Keep America Covered” program would work. The family in need would notify their mortgage company of their unemployment or troubled situation. The family would, of course, have to prove that their situation falls under the guidelines justifying the delayed payment program. By law, the home owner would be allowed a delaying of twelve house payments. Their home loan note would continue to accrue interest during the delayed payment program. This process would discourage people that are not in real need from taking advantage of this option. These twelve “frozen” payments would be tacked on to the end of the original payment plan. For example, my parents loan with a twenty year note would then add an extra year of payments going into year twenty-one.
This delayed home payment plan would be a one time only usage for homeowners. You do not want to create a program that could be repeatedly utilized by families. This would be disastrous for the banking system. It would also have negative motivational implications for families to solve their own financial crisis. Another key component of “Keep America Covered” is that the twelve months of frozen payments doesn’t have to be used all at once. For example, a person loses their job or some other situation arises. They need enrollment into the program so they apply for the “Keep America Covered” program. The assistance plan has a total of twelve deferred monthly payments. These payments can be used all at once or in multiple segments. Let’s say after six months of deferred payments, this individual finds another job and is back on track. The bank, in turn, can be notified and the deferment of payment program can be cancelled. With “Keep America Covered” in this particular example, the person only used six of the twelve delayed payments. That applicant can still...