The frequency of foreclosure in our nation today is dangerously high. The strain from the recent economic downturn has put many families and individuals in a financial chokehold preventing them from being able to make their monthly mortgage payments. Consequently, many of these people feel they’ve punched a one-way ticket to foreclosure. With all these homes being foreclosed on, we face a very real crisis.
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually.
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The simple solution is to reduce the home owner’s monthly payment to an amount they can afford, by reducing the size of the loan balance. The framework would be as follows:
Government stimulus funds are applied to pay down the owner’s home loan to the bank with two caveats. First, the bank must re-amortize the payments on the lower loan amount; second, the government funds become a filed lien (second mortgage) on the home. This is a RELIEF loan.
1. This program is open to every low, moderate, and high income family
2. All participants must file a full tax return each year
3. The amount of the government RELIEF loan cannot exceed 40% of the home’s tax- assessed value , or $100,000 maximum
4. Government loans are repaid through the following:
Apply IRS refunds to the balance
Allow 401K withdrawals without penalties to be applied to the balance
Apply a set percentage of federal entitlement money to the balance (Possibly 15%)
Apply proceeds from the future sale of the home to the balance (Any remaining balance becomes an unsecured loan)
5. The RELIEF loan is interest free for first five years. The interest rate for the remaining years will be nominal (Possibly 2%)
EXAMPLE
Take a typical family of five that purchased their house in 2007 at the median house price in Portland, OR of $295,200. With a typical home loan of 6% interest rate over 30 years, they are making monthly principal and interest payments of $1681. After two years, they now
Seeing other people reactions towards foreclosure helps me to develop a meaningful value of life and how to appreciate it everyday of my life. As I see what is going on around me I came up with three plans that can be executed to help all people who are dealing with foreclosure issues. This can become a major factor for the economy. One is called Own A Home , Financially Fit, and Bills To Kill. These are guaranteed plans that will help any individual that feels that they are not financially secured to become a homeowner. The Own A Home program is designed for aspiring homeowner in which they
Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.
There is by no means a simple solution to solving the home foreclosure epidemic but there are many changes that can be made to help Americans across the globe. The first, I believe starts
There are many interesting proposals to help homeowners who are in the process of foreclosure. Just recently, before the election, Senator John McCain proposed to the Treasury to spend $300 billion to purchase troubled mortgages at face value and then the “Federal Housing Administration would issue a new, federally guaranteed 30-year fixed-rate loan, based on the property's present value, at a "manageable" interest rate” (McKinnon, 2008). Under McCain's plan, the government would pay for the loans and take the whole loss rather than putting the responsibility on the lenders. His plan carries large benefits for the homeowners, but it will decrease
Foreclosure is a dangerous issue that has swept our nation in the last few years. Americans are losing their homes due to jobs being lost, home values falling, and banks lending out more money than homeowners can afford. Despite the multitude of issues that arise out of foreclosure, the main problem at hand can be almost solely traced to the economy. The recession has put many people out of work, made taking out loans more difficult, and has caused a nationwide panic. Therefore, to completely solve the foreclosure problem, it is necessary to trace the issue back to its roots, being the economy. This would take fifty pages to discuss, so this paper seeks to solve one aspect of foreclosure. Refinancing is an option that has become
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home
The year is 2017, and my parents have only just now reached the equity levels in the house that they started with over a decade ago, nearly one-hundred-fifty mortgage payments later.
without a home and in financial straits in the aftermath of the 2010 Foreclosure Crisis. However,
Attention, you just lost more than 50% of your home’s value and since you are in default on your payments the bank has decided to foreclose. The housing bubble in the United States despite the warnings of financial experts, led to a series of events that were exposed as a result of the bubble bursting. In the wake of such financial devastation was the onset of various homeowner relief programs designed to prevent a plethora of foreclosures and reduce further damages to the economy. Unfortunately, many fell victim to this collapse and were not afforded the opportunity to delay the foreclosure process or outright denied any of the available options by their lenders. Despite the negligent lending practices that contributed to high-risk loans being
As the saying goes, history repeats itself. The Great Depression is a time in American history that will always be remembered as a time of hardship in Americans’ lives. The goal: to never have such great oppression exist in the United States again. With the way the economy is headed today, many people are skeptical as to whether history will really repeat itself and create a new Depression. One of the biggest problems in the country today is the foreclosure crisis. Many Americans are living outside of their means or have lost their jobs and are unable to make their mortgage payments. When people can’t make their mortgage payments, they will lose their home and their family will be out on the streets. There are definite changes that need to
Brooklyn, NY – December 30, 2009 Foreclosures continue to rise drastically across the United States due to the recession, and have effected, and continue to affect thousands of families and individuals every day. One aspect we must take into consideration is that most people are not informed of what foreclosure means, or the process, even those who are homeowners. I believe that one step to preventing foreclosure is to educate first-time homebuyers. In addition, first-time homebuyer programs should not only assist potential buyers with financially preparing them to buy a home, but to keep the home once
As the foreclosure crisis in the United States continues to spiral, increasing attention is being given to novel and creative solutions for reducing the risk of mortgage default. The Obama administration has proposed several government-backed programs to help homeowners stay in their homes, and private lenders have tried various approaches to stabilize the economic situation. To date, none of the enacted efforts has substantially improved the crisis, and as such the number of homeowners filing for bankruptcy and entering foreclosure continues to mount.
One way to solve the foreclosure crisis is to actually foreclose on every homeowner’s home loan, including the homeowners in bankruptcy, pre-foreclosure and post-foreclosure. The credit report of these homeowners should read as a recession in 2009 and it should not lower their credit scores. The banks should then match the previous interest rates to the interest rates of today and appraise each home and property at the value that it was assigned by its local tax assessor.
The United States economy has been in trouble for the past couple of years. The foreclosure crisis is a condition that began due to the inability of homeowners to pay their mortgages. Foreclosure is a legal proceeding whereby a lender obtains a legal termination of a debtor’s right to redemption. The foreclosure rates have been increasing for a considerable period and certain steps have been put into place to solve the problem. While the government, financial institutions and the general public are highly aware of the crisis, the steps taken to combat the problem are still not sufficient as the foreclosure rates are still increasing.
Home foreclosures have been a hot topic in recent months as the economy has been in a serious downfall with a very slow recovery process. There are many different philosophies and many people truly feel that we can recover from this. We can alter the foreclosure status by giving serious consideration to the economic times and the types of mortgages that are available. Buyers must become more educated on the additional costs when getting a mortgage such as taxes, insurance, etc. The government has to take steps in regulating these types of entities and not be looked upon as the factor of salvation in saving the banks and mortgage industry.