Solving the Foreclosure Crisis Essay

1087 Words 5 Pages
Not since the Great Depression of 1929 has America experienced such economic chaos, job and housing loss. Perhaps housing loss was not as wide-spread then since there were fewer homeowners. The government supposedly put in measures designed not to let those on Wall Street cause the same thing to happen again. Yet, here we are some eighty years later in the same situation. It seems that history keeps repeating itself. The question is why? The answer is greed. Unfortunately, the question "how can we stop it from happening again"? cannot be answered in one definitive statement. Of course the solution to preventing home foreclosures is "prevention," which in itself comes with a lot of variables.
Background Information As of December 29,
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Her mortgage was in pre-foreclosure when she was finally able to get relief under the current Obama Administration housing plan. Selling her property is not an option because she owes more than the property is worth and it will more than likely not improve that much when the housing market rebounds. Additionally, mortgage repayment rules are too stringent. For example, if a person is late making a payment, the mortgage company refuses to accept that payment without the current payment along with late fees. In some cases, this can amount to thousands of dollars. There is no consideration as to why a person who normally pays on time is late, regardless of whether the person notifies the institution about their circumstances or not. Once a person who is already living on a shoestring budget falls behind in his or her payments, it is very difficult to catch up; especially when there are other living expenses, medical bills and high priced prescriptions to purchase, children in school, etc. etc. Additionally, some people are allowed to go into "interest only" or escalating loans, which gives them the leverage to purchase a house they really cannot afford if they had a fixed mortgage loan. These types of loans should be eliminated from the financial industry. If people are forced to buy what they can afford, there is a 99% chance they will not fail or go into default.
A Decent Proposal If a homeowner is able to keep his or her home, everyone wins. One idea

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