It is a well know fact that the world is in a financial crisis which has resulted in the foreclosure crisis. This is a problem that can not be resolved by the government alone. If the government continues to hand out bail out money to businesses trying to help them avoid bankruptcy or from going out of business the national debt will continue to increase. The national debt will have to someday be paid off and if the government continues to borrow money the result will be higher income taxes paid by those that are already struggling to bring home a paycheck that will meet their basic living expenses. In turn this will make the financial crisis continue to get worse as time goes on. This is a problem that has to be solved by each business and each person together.
The government should only have to assist in developing a plan, educating businesses and people; create some guidelines for businesses while encouraging everyone to do their part in bringing the economy out of this crisis. This includes better financial education in high schools and colleges.
Today’s employment opportunities have diminished over the last few years. People are taking pay cuts, losing jobs with little success at finding jobs or jobs at the same income level as they were at the time they financed their homes which has resulted in foreclosures. Many people are faced with having to increase their education to now find employment in fields they previously worked as they are no longer considered qualified due to lack of educational requirements. This creates more of a financial burden for the already financially impaired by taking out loans to cover the ever rising educational expenses to be even considered for job opportunities.
The big question is “How to solve the foreclosure crisis?” With my knowledge of business and finance I have a solution that I believe will help many people stay in their homes and lessen the burden on financial institutions.
The solution is mortgage amendments. These amendments are not the same as a refinance and do not require any refinance fees or appraisal. They should take very little time and expense to create, approve and be considered a legal amendment filed with the original documents. These are meant to be temporary but the time limit on them is dependent on the borrower’s income allowing them time to find a job or increase their current income.
There will be two types of amendments. The first one will lower the interest rate significantly which will lower the monthly payment without changing the term of the mortgage. This one can be very beneficial to those who have taken a pay cut or a slightly lower paying job and will not extend the term of the loan.
The second one will also lower the interest rate significantly but will also lower the principle payment and extend the term of the loan until the loan is paid in full. The disadvantage to this amendment is that...