My plan to fix the housing crisis would be a two phase plan. The first phase of the plan would be how to handle what is going on right now and what to do about the people that are already the causalities of this catastrophic failure of American free enterprise. The second phase would be on how to prevent this from happening again.
The core of the first part of phase one would start in education I am aware that you need to take an economics class in order to graduate high school; a new requirement would be added to high school graduation requirement. The basic economics or government class that is now required would also need to cover a basic understanding of money management, personal finance and of course mortgage laws and vocabulary. This would give each person who graduates high school a foundation of knowledge in the management of finance and understanding the problems associated with overextending ones self in their personal finances.
However, this education does not need to wait to begin in high school in could be incorporated in the basic math lessons, history lessons and reading assignments. Education is the key to ensure that this does not happen again. Once we make sure the American people are educated and are held responsible for any transactions that they sign for then and only then can we make the mortgage business strong again.
After addressing education and personal responsibility we need to look at the real cause of the mortgage crisis. The first thought that comes to mind is greed. The more mortgages approved, the higher the dollar amount the more commission was made. Now, it is time to hold these banks and or mortgage companies responsible for the misinformation that they gave to people when applying for loans. They knew the borrowers could not afford the mortgages they were approving for them.. In order to get thin under control, we have to make some sort of reparations for their actions. Because of their actions they have made poor people poorer and some people to become flat out homeless. To put it plainly they took advantage of people. So, my plan would also include a provision that the mortgage companies and banks be responsible for the funding the building of dozens of homeless shelters across the country. However, for the people that did not become homeless but still were foreclosed upon they would have to enroll in a money management course that would be also funded by the banks and lenders.
Phase two would be implementing more stringent guidelines in mortgage approvals. The government would really become heavily involved rather than the acceptance of a loan being based upon the individual banks and lenders.
A universal standard for loan eligibility and mortgage amount would be put in place. There would not be any special circumstances for a loan to be or not to be given out the only thing that would make it change would be the economy. Obviously if we have a bad economy...