The foreclosure crisis in America is reaching epidemic proportions. As long as the rules the mortgage companies set stay the same, the bottom will fall out of the housing market.
As I write, my former neighbor's front yard is cluttered with piles of furniture thrown out by the sheriff after their home went into foreclosure. I remember when they moved in years ago, a couple with their two little girls, now teenagers. I have no idea where they went, but they left many personal belongings behind. The façade of the neighborhood is now uglier. That house sits across from another foreclosure which has not been sold in months. It was occupied by an army officer, his wife and children.
Foreclosures are hurting us all and they have risen 50% since last year. It is a silent and deadly epidemic. A record number of people are losing their jobs. Many people are underemployed as their hours are cut or they lose days because their companies cannot afford to pay them full salaries. American's are now caught up in one of the worst economies since the Great Depression. Congress needs to act accordingly.
People who would normally sell to avoid foreclosure can't because of a housing glut, stricter loan criteria and buyers who are strapped for cash. Prolonged high gas prices have had devastating long term effects on working families. Refinancing is no longer an option for millions as property values plummet. That safety net has vanished. It is time for a moratorium on foreclosures.
Economists argue that it will cause banks to raise interest rates, but I contend that it is in the interest of banks to do this now. The alternative is to watch the housing market crash and burn. Hope Now is a waste of time. The mortgage companies run this program and they still set the rules. People who can't pay their mortgages probably can't qualify for loan modifications. That's why Hope Now has only been able to help 2% of those who apply. The mortgage companies must offer payment plans without requiring families to qualify. States that offer judicial foreclosures have much lower foreclosure rates. It's time for real change. States must give homeowners more time to restore their finances before mortgage companies take their homes away. Housing prices will stabilize. Communities won't fall into squalor and the economy will benefit. Act now.