Foreclosure is a dreadful aspect of home-owning. The American foreclosure crisis, and its subsequent economic recession, was caused by lateral misguidance on part of private banks, the federal government, and by the millions of people who purchased their homes on credit. Over 900,000 foreclosures have occurred in California alone, making its foreclosure rate the largest and most formidable; as a result of the housing downturn, private banks like JP Morgan and Wells Fargo succumbed to bankruptcy, as the toxic assets they possessed lie curdled and menacing. Stocks tumbled as confidence in our financial system crashed; millions of people lost their jobs in the course of one petrifying year. The lending process was halted, effectively stalling the crediting and lending system that has shaped American consumerism habits since the 1950s.
But this is all well known. The process that led to the foreclosure crisis, the sickly details of the economic crash, and the terms of our recovery have all been mulled over repeatedly. At this point in time, economic recovery still remains as a top priority to the average American. Yet, what hasn’t been decided, or enacted, is how to solve the foreclosure crisis: and in the same vein, how to restore America’s economic tenacity. There must be a combined effort through the three major levels of this crisis – the banks, the Government, and the individual American – in order to stave this crisis in its tracks and start rebuilding a wiser, structured mortgage lending plan that integrates lucidity and sustainability. We must break free of this financial limbo, and finally commit to substantial action in order to solve this predicament.
Current legislation travelling through the United States’ House of Representatives and Senate strives to outline the formation of a Consumer Finance Protection Agency (CFPA). It would be separate from the U.S. Chamber of Commerce, and would possess federal powers to regulate mortgages, credit cards, and car loans. According to USA TODAY, this legislation “would usher in the biggest changes to the nation’s financial system since the Great Depression” (Schouten). It is the one of the first examples of a federally-backed effort to address the repercussions of our foreclosure crisis, and to move our country in a positive direction. The CFPA’s specific aims have yet to be outlined or determined, and in that case, I will propose a solution for this agency and its supporters to instigate. The first part of my plan is specially geared towards the CFPA and its capabilities, while the second part will have to be determined by the U.S. Senate and Treasury Department.
1. Consumer Intelligence
Within the constructs of a mortgage lending plan, whether traditional or modified, there will be a clause that requires every consumer seeking a loan to pass a “Mortgage Loan and Foreclosure” course in order to receive a Consumer Intelligence Certification (C.I. CERT). The federal government will...