Households from all over the United States are currently experiencing massive wealth destruction. Even after the housing crash that led to the financial crisis and the eventual bailout of the financial institutions, individual families are still seeing their homes being foreclosed and their life savings diminishing to nothing. The government assistance programs that have been implemented so far have only helped the institutions that created this crisis and the families who are hurting the most have yet to receive any significant assistance.
Foreclosures are still happening throughout the country in both suburban and urban areas. We can all agree that foreclosures in any neighborhood are detrimental to the community as a whole as they
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To solve to foreclosure crisis, we must ask the government to help the individuals like they did the institutions. Just as the government decided to help AIG, Bank of America, and Citi and not Lehman Brothers, the government should decide who will be helped and who will not. My proposal is that the government should help families who have the ability to pay off their mortgages with a bit of assistance. Others who cannot feasibly pay off mortgages they entered should not be helped. I believe that this will significantly alleviate the foreclosure crisis and help everyone involved in the process.
We must first categorize all the borrowers who may be near foreclosure and then separate them into borrowers who can pay off their loans with assistance and those who cannot. I would distinguish the borrowers into these four main categories: Adjustable interest rate borrowers, fixed interest rate borrowers, interest only payment borrowers, and other agreements such as reverse mortgage borrowers. Of these four categories, only the first two have a chance of paying off their mortgage with government assistance. A borrower paying interest only who cannot make the monthly payments has no reasonable chance of paying off the principal of the mortgage. These homeowners