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

Solving The Foreclosure Crisis: Two Solutions

1416 words - 6 pages

It does not take much attention focused at the media to see that our great nation is struggling economically. One of the major contributors to this current economic meltdown is the rapid increase in foreclosures across the country. The country’s immense housing crisis can be addressed by referring to not only the accumulating irresponsibility of the individual American loan borrower, but also the growth of greed at the corporate level which led to the financial market’s negligence. To stop the spread of this issue we should look at closer government watch of the market and specifically focus on consumer education.
The Quagmire
What is foreclosure? Well it is actually a simple concept: foreclosure occurs when people default on their mortgage. Say a person goes into a brokerage firm with intent to buy a home. Unfortunately the person is not capable of paying off the home in one enormous payment so he or she ends up buying a mortgage. A mortgage is payments divided up over a period of time with some interest rate on them. Instead of waiting around and simply collecting interest, the firm passes on the mortgage to an interested bank. Then the bank sells the mortgage to the stock market so investors can have a field day. This quick pass off of such an important and delicate subject leads to a great deal of negligence. It gets even worse when the mortgages are collected in one big money making pile at Wall Street. Then no one pays attention to the possible consequences that can occur. Such consequences include how the original borrower’s income will not be able to keep up with rising prices in the market and the chaos that results when big financial firms loosen money lending requirements for the borrower to expand their market.
As one gets richer one only tries to open more pathways to get even richer. In the housing market these pathways were opened by such things as the SIVA (stated income, verified assets) loans, then NIVA (no income, verified assets) loans, and eventually a combination of the two known as NINA (no income, no assets) loans. This degeneration of restriction on giving out loans created an environment where lenders were no longer interested in income or assets of clients, just a credit score. This allowed for nearly any yahoo to be eligible for loans. It would be as if we lowered the driving age to nine so that the auto industry could increase its sales; any sane person can see the possible horrors that could occur.
When individuals request a loan to purchase a home they sometimes do so without a good strategy. Moving forward with such complex and shortsighted decisions without any financial planning can result in catastrophe for these people. Say average Joe has just graduated from college and has worked a couple of years. He believes he is now ready to buy a home. Without any experience in the matter he looks for guidance from a financial advisor, for example his banker, who has his or her own industry’s best interests in...

Find Another Essay On Solving The Foreclosure Crisis: Two Solutions

Solving the Foreclosure Crisis Essay

1824 words - 7 pages a solution for solving the foreclosure crisis. My four-pronged plan would favorably move our nation out of its immense predicament. On a personal level, however, my plan would help hurting families and individuals overcome the stigma of financial ruin, empower American homeowners to make better home-buying decisions and also improve the home-buying process. As well, however, this plan would help neighborhoods, communities and cities across the

Solving The Foreclosure Crisis Essay

994 words - 4 pages way it was and if we don’t change things now will only get worse. As with the Financial Institutions all businesses need to lower their profit margin and manage overhead costs. This is the only way that the United States will overcome the financial crisis. As a result of the financial crisis there is the foreclosure crisis. Solving the foreclosure crisis is only a small part of what needs to be done to bring us out of the financial crisis. To

Solving the Foreclosure Crisis

1157 words - 5 pages homeowner facing a potential foreclosure. It is significantly about giving a second chance especially where one is needed. ‘Yes’ is more of a powerful word than ‘No’ will ever be because there are more negatives factored behind the word ‘No’. The government’s realization of the foreclosure crisis denotes abundant ideas for possible solutions. It is very apparent that homes should be more affordable than they are and this issue would be

Solving The Foreclosure Crisis

1304 words - 5 pages hungry public caused a financial crisis the solution to the foreclosure crisis is as complex and complicated as the problem itself. . The solutions to the foreclosure crisis means creating a standard for homeownership, structuring adjustable rate mortgages, utilizing current foreclosed properties and modifying current loans. It must be said the current plan to stimulate housing with the tax credit is a good incentive to boost the market. The

Solving the Foreclosure Crisis

1278 words - 5 pages , the banks must charge a higher interest rate in order to avoid further flooding the housing market of unsellable property. Overall, the foreclosure crisis is very complex. It is both a financial crisis in the overall state, but a very personal issue since it results in people being displaced from their homes. It is very important that the high-level goals defined above are prioritized when solutions are developed to prevent this type of crisis

Solving the Foreclosure Crisis

1410 words - 6 pages Upon further review of our nation’s current foreclosure crisis, it is obvious that the most common causes are either an owed debt or job termination. To handle such a situation as this, a plan must be devised on a level that impacts all the US citizens the foreclosure crisis has affected. This means every affected person no matter their social class status should have the eligibility to be positively affected by the plan with no uneven

Solving the Foreclosure Crisis

1060 words - 4 pages In order to solve the foreclosure crisis, first we must identify and examine the reasons why people are going into foreclosure. The unstable economy which has led to the loss of thousands of jobs is the most obvious reason that people are foreclosing their homes. Without a stable and sufficient source of income, it is virtually impossible to pay back mortgage lenders. The first step we should take to solve the foreclosure crises is to create

Solving the Foreclosure Crisis - 1131 words

1131 words - 5 pages education or a responsible role model when it comes to financial decisions. There are no simple solutions to solving the complex foreclosure crisis the nation currently faces. There are several factors that can be addressed that will, over time, help to stabilize the economy and prevent future economic crises. Change is a must. More education and an increased awareness of financial obligations can help to resolve the foreclosure crisis and economic downfall and protect our nation for future generations.

Solving The Foreclosure Crisis

1056 words - 4 pages The current foreclosure crisis is affecting everyone in this nation. If people are not experiencing the crisis firsthand, they hear about it through family, friends, and their other social networks. Nonetheless, it is impossible to escape because the media is constantly showing coverage about it. People are becoming more aware and seeing how expansive the impact is through television, internet, print, and radio. Americans are quickly

Solving the Foreclosure Crisis - 1052 words

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

Solving the Foreclosure Crisis - 1237 words

1237 words - 5 pages everyone was happy with the situation at the time. The homebuyer was happy. The real estate broker was happy. And, the mortgage company was happy. All this happiness fell apart when the economy hit the skids and the rest is history. If we are going to get out of this mess, we have to think in more innovative terms and I believe that the three plans I have presented here would go a long way in solving the current foreclosure crisis. At

Similar Essays

Solving The Foreclosure Crisis Essay 1004 Words

1004 words - 4 pages imperative that needs come before wants when in a position of foreclosure. Solving the foreclosure crisis is a very big assignment to do but it needs to be handled by the government. The government plays a role in everything including foreclosing homes, so with the government’s help it will improve the foreclosure crisis tremendously. The government can make a system specifically geared toward helping those who are going through the foreclosure

Solving The Foreclosure Crisis Essay 1403 Words

1403 words - 6 pages fingers to and criticize; instead, we must acknowledge the multiple factors that contributed to this crisis. Still, with so many unrelated causes, it is difficult to pinpoint where to even begin proposing solutions. I could sit here and offer a list of very specific solutions to each aspect of the issue, however I have a major problem with the Foreclosure Crisis: I don’t really understand it. From what I have read and seen in the media, the simplest

Solving The Foreclosure Crisis Essay 1021 Words

1021 words - 4 pages long run. There’s a simple solution to this foreclosure crisis. My plan comes has two parts to it. These are simple parts that have been widely overlooked as the solution to this monster that has been devouring the lives of thousands of Americans. These two parts are: education and jobs. Many Americans aren’t able to pay off their mortgage or their loans because they simply aren’t paid enough. Simple example: say you owe someone $500 a month

Solving The Foreclosure Crisis Essay 1005 Words

1005 words - 4 pages Americans spend more than they make every month. Fifty-two percent of Americans are living pay check to pay check causing them to be at risk of foreclosure. Although foreclosure is a growing problem, with the proper background checks, more government programs, and renting before buying the foreclosure crisis can be solved. Recent years have proven that getting money to buy a home has become extremely easy. To qualify for a loan all one really needs