Helping Homeowners Facing Foreclosures would Benefit All

by Simon Lindsay on Foreclosure Help, Stop Foreclosures

With the rising number of foreclosures hitting the American economy, a nationwide program is underway in an effort to assist these troubled homeowners. However, the plan has received criticisms from various sectors, questioning the need to support these delinquent homeowners while the majority of American families are keeping current with their mortgages.

Records show that towards the middle of this year, 93.8 percent of loans have been paid on schedule. These high rates holds true at 80% even for subprime loans where most foreclosures occur.

The federal government is planning to rework billions of dollars worth of mortgages that are in the danger of facing foreclosures. The primary aim of the program is to make amortizations affordable for these families through interest rates reduction and loan term extensions. This triggered another round of criticisms from detractors claiming these homeowners should never have had exuberant mortgages in the first place.

Still, experts are calling for some kind of intervention from the government to address foreclosures. They have outlines reasons why helping troubled homeowners would benefit the nation, and everybody else, as a whole.

One reason is the benefit to the overall economy. The current financial crisis was triggered when the real estate bubble burst and prices started dropping to terrestrial levels. This caused a chain reaction as foreclosures increased and unemployment started to soar. Economists believe that bringing stability to the housing industry can put the economy back on track.

Another reason is with regards to home values. The rising trend of foreclosures resulted to a big devaluation of home prices, putting some homeowners underwater, where they owe more in their mortgage than what their homes are worth. Putting an end to this crisis would put market values back to optimum levels.

Helping homeowners prevent foreclosures is a way to support fellow citizens who can be considered victims due to subprime lending. In a similar manner, a $25 billion dollar bailout fund for homeowners would be fair enough, considering that the government is willing to spend $700 billion of taxpayers’ money to salvage the financial industry.