Solving the Foreclosure Crisis Essay

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The escalating numbers of home foreclosures since 2006 to 2008 has grown from 268,532 to 1.4 million, which is an expansion of more than five times (GDAEman 2008). This skyrocketing dilemma has many factors that contributed to its epic growth, and much needs to be set into practice before the housing market turnaround will be evident. Many families are at a place where they need loan modifications, but a Bank of America representative stated that B of A is first dealing with the homes facing foreclosure. For those individuals who have faithfully kept up the mortgage payments and are in good standing with this lender, not much is being done. This last group of consumers and many homeowners that were responsible and are in need of help due …show more content…
Eventually almost anybody could qualify for these bad loans, which contributed to the housing market crash. Adjustable rate option arms changed to an interest rate many people could not later afford causing a huge problem for the U.S. financial system (Jarvis, 2009). Another article shows the correlation with rising number of people that are losing their jobs. Stephanie Armour, writer for U.S. A. Today, states that almost half of the mortgage defaults are caused by unemployment; not like in 2007 when most of the foreclosures were caused by having “risky loans” (Armour, 2008). According to the Labor Department, unemployment is at its highest since 1974 with over 4.3 million collecting unemployment money from the states (Armour, 2008). With the combination of bad loans and unemployment foreclosures increased dramatically writes Reporter Armour. In addition, people that have fixed, 30-year loans are also losing their homes due to unemployment (Armour, 2008). In addition, banks cannot give out loans to people without a job. Thus, many people who have option-arms and were advised to “just get into the house and find a better loan later” planned on refinancing for a better loan but couldn’t because banks refused refinances. Even if a lending institution grants a new loan, these aren’t affordable either says Elena Rivkin Franz, a real

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