How to Solve the Foreclosure Crisis: The Government Home Loan Option

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How to Solve the Foreclosure Crisis:
The Government Home Loan Option

The foreclosure crisis was not an occurrence that could have been foreseen by most. During 2007 and 2008, gas prices were soaring at their highest since the late 1980’s, averaging around $3.50-$4.00 per gallon across the nation. The increase in gas prices caused many lower class and middle class citizens and families to suffer significantly. This led to a heavy decrease in frivolous spending in most regions, causing a domino effect of various businesses cutting employment and wages, following with a sharper decrease in economic spending, and the delay of the construction industry which resulted in the slowdown of the timber business. With the rapid retard of these
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The government is one of the few entities that can maneuver their resources to assist the many individuals and families that are in the position to lose their home.
To prevent families and individuals from being driven into foreclosure, the government should obtain the bad mortgages from the banks, this will be referred to as the Government Home Loan Option, which also prevents the banks from going under and avoids the situation of bailing out the financial industry. After the government purchases the failed finances from the lenders, the government should allot a period of time for the individuals, whom need assistance paying their mortgages, to get back on their feet, for many of these people have probably lost a significant amount of their monthly income and fallen behind on their financial duties, and start making their home payments towards the government. The Government Home Loan Option will require interest to make up for inflation, though the interest rate should be fixed, and significantly lower than those set by big banking. However, rather than only offering a exceptionally low interest rate (compared to the individual’s previous interest rate) over an extensive period of time, such as forty or sixty years so the borrower can option for lower monthly payments, there should also be an alternative to increase the interest rate and shorten the

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