The housing market should not be seen as separate from personal and family economics in general. To solve the foreclosure crisis, there should be public as well as nonprofit programs and courses in place to educate people and families such that they are motivated to remain economically sustainable and are skilled and supported in managing debt—and especially so if they are current or prospective homeowners. These courses would begin at the high school level and continue through college and adult school at limited to no cost. Also, there should be community agencies and legal professionals advocating on behalf of current homeowners facing foreclosure of their properties. Finally, there should be resources available through social programs catered towards families who aren’t necessarily living in poverty; but have recently lost their home due to foreclosure, and need some help getting their lives back on track.
Right now the primary “educators” of the financial system are corporations with a vested interest in the ways the public manages money. Every day people go to a bank, credit institution, or other financial corporation because of an existing need or deficit—they need shelter, they need to pay off their debtors, they aren’t making enough money at their current job(s) in order to feed their families. This need is heavily exploited in the form of volatile interest rates, unexplained accounting fees, and loopholes in the legal system allowing financial corporations to be unaccountable for missing money. These companies will only give limited information, unless credit consumers are educated enough and empowered enough to “pick” their policies and procedures, to carefully scrutinize their monthly statements, and to follow through with the figures that don’t seem quite right. Most people don’t have the time or motivation to do this, but they realize at a later time that what are seemingly minor oversights add up to an enormous financial crisis that affects their entire family.
For example, consider a woman who is seeking a loan to fund her first home. She is employed full-time and has a reasonable credit score. She is making multiple payments to her credit cards, educational loan debt, and car. She is a single mother of two but has managed to stay current on her payments and to maintain a decent balance in her savings. She wants to buy a house. So she immediately goes to a lender. The lender speaks only about his/her own institution and how great their interest rates are. She does not know about how the rates might fluctuate or understand the system of payments and fees. She might be told again and again not to worry about things because it is a routine process. She signs the documents, she is a homeowner, and before she realizes it, she is in over her head because nobody ever thoroughly explained to her in an unbiased manner how circumstances might change with the economy, with fluctuating property...