Proposed Plan for Resolving the Housing Crisis in America Essay

Thesis: Buying your first home can be an enjoyable, exciting and profitable experience given specific knowledge of the process and a basic understanding of the market place.

During this time period, homeownership typically required a 20 percent down payment (Melicher & Norton, 2014, 168). Lending institutions were very careful about whom they lent money to, and credit standards were high (Melicher & Norton, 2014, 168). Melicher & Norton (2014) called this the “save now, spend later” philosophy, and it would change in the coming years (p. 168).

For the last several years, the one issue that has been bringing the United States into a state of trouble that it has not been seen since the great depression has been the monstrous Foreclosure problem. Thousands of people have lost their houses. Thousands of people have faced the dangers of debt and chaos. Thousands of people lives have been ruined because of the mistakes that Americans have done in this nation. In order to solve the problem, one must take a look at how it started and how this depression began. Around eight-nine years ago, the market in housing caused many people to chase after it. This caused a mistake of creating a domino affect that has hurt banks from lending out the high amount of money to people and finding out

Within the past three to four years, the United States has seen the dramatic collapse of the housing market. The housing bubble spurred by ill-advised loans to individuals who could not afford a mortgage, complicated contracts which had interest rates and payments changing without reason, and the mass purchasing of bad loans by lending superpowers, had popped. The rapid increase in the value of homes across the country for the previous decade, had been a falsity, in which billions of dollars funded by investments and home purchases were lost within a few months (Wikipedia.org: United States housing bubble). Millions of home owners were found to be unable to pay their mortgages, leading to hundreds of thousands of foreclosures. These

As the economy drops and foreclosures are on the rise, millions of Americans who were financially stable several years ago are asking the same question, “How could this happen to me?” The crisis has occupied the minds of politicians, who are trying desperately to solve this problem, but the tragedy continues as more and more Americans are foreclosed on with no alternatives. The foreclosure crisis will not be solved by simply lowering interest rates, firing loan brokers, or other short-term, ineffective solutions. The long term solution to the housing crisis has nothing to do with housing. The government has lost its way and needs to redirect the way the whole economy is run.

The foreclosure crisis is a problem disguised as many smaller problems: political, social, and economical issues to name a few. Just like there are several conditions that need to be present in order for a hurricane to form, several things need to come into play in order for foreclosures to persist. The economy’s generous desire to supply every family a home through zero down payment mortgages, the aspiration of a social classes’ need for status as being homeowners, and a city’s political structure’s greed for their cities to grow; are all in good intentions. But to sustain people in a city with a home and a healthy loan will require us to break down our old ways and construct a better method that will still allow families to own their own

The crisis that America has found herself in, to be completely blunt and honest, all revolves around stupidity and bad choices. American citizens that had absolutely no business even thinking of buying a house flooded the market and were encouraged by greedy bankers that were out to make a profit, without thinking of the consequences or morals involved. Now the government has over stepped their boundaries and are spending this country into such deep debt, which makes one think that that light at the end of the tunnel is an oncoming train with no hope of slowing down, let alone stopping. The solution to this economic crisis is outlined in seven easy baby steps: 1. America needs to create a small emergency fund (at least a million

The economic crisis that has occurred in the recent years and that has consistently worsened over past year or so has led to many other problems, one of which is the foreclosure crisis. More and more people are losing their homes due to job loss or simply poor financial choices. The number of unemployed and homeless is increasing at an alarming rate. Many feel like there is nothing that can be done to remedy the situation, especially when the enormous debt that the United States has already accumulated is considered. There is not just one simple step that can be taken to fix this serious problem, but there are a series of things that the government and financial agencies can do to help gradually improve the situation, including more

In order to prevent another housing crisis we must implement programs that would teach housing buyers and potential homeowners how to buy homes wisely because most potential homeowners are unsophisticated and do not know at what rate to buy homes and set personal guidelines for mortgages. The complexity of buying homes not only affected homeowners and home buyers but also confused sophisticated securities investors in that these securities investors sold MBS (Mortgage Backed Securities) at an excessive price range that the MBS should never had been sold at.

Home buyers must have a plan to succeed in becoming a homeowner. Yogi Berra stated “If we fail to plan, we plan to fail.” Planning for owning a home is not just a matter of

Homeownership is one of the many aspects that make up the equation of the American dream. Buying a home for the first time brings pride of success and independency from the person who has this opportunity. This American dream is something that parents dream for their children from the time that the child is conceived. Being able to buy a home for the first time is an accomplishment and a dream of a lifetime. However, this dream isn’t cheap and cannot happen in a short amount of time. When a person buys a house there is a lot that goes into it such as knowing about your credit, your budget, and the type of home that you would like to purchase.

We have seen that near failure of the US economy, with the DOW and the S&P 500 reaching 12 year lows as of March 2009. Different perspectives and beliefs offer a variety of assumptions that can be drawn about the current and future state of the home foreclosure rates and the US economy. However, one conclusion can be agreed upon by all. Without a feasible and practical solution to the foreclosure crisis this cancer will continue, and thus begins the race to find a solution.

The concept of the ‘American Dream’ has changed dramatically over the past couple decades. Originally, the ideal American Dream consisted of marriage, children, a stable job with a high enough income to save and invest, and buying a house for the family. Subsequent of the Great Recession, buying a house is not as desirable or even feasible for the millennial generation. Millennials are interested in a different American Dream, focused on receiving an education and making enough money to pay the bills. There are multiple factors that drive Millennials away from homeownership, including difficulty obtaining a mortgage loan, establishing credit, permanency, and securing a down payment.

When it comes to housing, a consumer must make the decision between renting and owning a home. First and foremost, the household must assess its financial status as well as its outlook for the future. Since most households do not possess the necessary financial resources or savings to purchase a house alone, a loan, or mortgage, must be taken out to meet such a heavy financial obligation. A borrower will apply for a loan from a lender through what is known as a primary market. The lender then evaluates the borrower’s financial status and decides whether to extend a loan and under what terms the loan will maintain. A loan can be obtained through banks, credit unions, finance companies, and a wide array of other sources of credit. Although, if payments are not made as

With more lost jobs on the horizon and fluctuating adjustable mortgage rates, the foreclosure crisis continues to plague America. A recent report from the Mortgage Bankers Association reveals that 14% of loans are behind or in foreclosure. This is largely due to lost jobs in this volatile economy. Many factors are involved in addressing a situation like this and one solution alone cannot solve the crisis. We saw millions of dollars in stimulus money go to lending institutions only to be left wondering why the problem is not going away.