Essay on Solving the Foreclosure Crisis

1192 Words 5 Pages
Foreclosure is a serious issue in America today, and one that is being escalated by the present economic situation in our country. As an American to whom the eminent sense of foreclosure is ever-present, I have given a significant amount of thought towards solutions to this problem. I firmly believe that the best plan of action is for the homeowner and the bank to re-work the loan by tailoring the monthly payment to better suit the homeowner and increasing the length of the loan. If the homeowner is unable to make payments due to the economic situation, it is still the homeowner's responsibility to pay them, however; the bank also took a risk when they loaned the money out, so it is also the bank's responsibility to ensure that the rate …show more content…
In addition, a typical homeowner will buy maybe three properties in their lifetime, where as, mortgage companies are in the business of assisting homeowners on a daily basis and are aware of the ins and outs of the financing. Because of this, these companies should be more aware of the economic responsibilities that come with owning a home and should have a higher level of responsibility and accountability in their transactions with the homeowners. It is up to the lender to set the terms of the contract in an economically sensible manner. Because the lender is investing their money into a property it only makes sense for them to be proactive in the beginning of the transaction. This would lower the pressure on homeowners because the payments would be manageable and they would feel like the lender is their teammate as opposed to their enemy. A more creative way banks could ensure a return on their investment would be to make the monthly payment based on the amount of income a homeowner takes in per month. This could be done by percentages. For example, a bank could give a homeowner a loan with the terms stating that the homeowner would give twenty percent of their monthly income towards paying back the loan. The loan would then be terminated when it was paid back in full and not at a set date. This way, the homeowner would put some money towards paying back the loan every month, but they

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