Putting an End to Foreclosures: Obama’s Bailout Plan

By Sara Shea

From fortune five hundred companies to average American homeowners, “bailout” is the buzzword everyone is talking about. With the economy in a recession and the housing market in a slump, the government is scrambling to appease uneasy Americans.

According to the New York Times, “Almost one in 10 home mortgages is either delinquent or in foreclosure, and analysts estimate that as many as six million families could lose their homes over the next three years in the absence of government action.”

Over the past year the economy has gone down and the number of foreclosed homes has gone up. Homeowners are frantic because many cannot afford the large mortgage payments due to high interest rates.

Over the past year the economy has gone down and the number of foreclosed homes has gone up. Homeowners are frantic because many cannot afford the large mortgage payments due to high interest rates.

Young people across the country are feeling the effects of the ailing housing market. “My girlfriend’s dad has been out of work for almost eight months,” said University of Maine junior Alex Ortiz. She will have to transfer because her parents can not afford tuition. It’s between sending her to school and keeping a roof over their heads.

Marist College academic advisor Nancy Lemmermann has several students under extreme pressure due to the recession and housing crisis. “I have one student who is struggling with her GPA,” said Lemmermann. “If she loses her scholarship she can’t afford to stay here.”

Though some believe government aid is needed to help the housing market, others argue that government aid is interfering with the economic cycle and that the housing crisis will be fixed in time.

President Obama has proposed a bailout plan that could help as many as nine million Americans refinance or avoid foreclosure. Though this plan sounds like the perfect solution to the ailing housing market, according to the Huffington Post it could cost tax payers between $275 and $350 billion.

“Its our best hope, buyers are buying again,” said California real estate agent Doug Digiore. “A lot of first time home buyers are back, which we haven’t seen in over a year. It’s really our only option, so I’m hopeful, but I’m not putting all of my eggs in one basket.”

According to the New York Times, the suggested bailout will target “homeowners who are still current on their payments, but who are paying high interest rates and cannot refinance,” as well as “about four million people who are at risk of losing their homes.”

“The bailout sounds great on paper, when you know very few details,” said Marist College junior Trey Savage. “Though I don’t have that much real world experience, as a business major I think the bailout is more like a band aid than a real solution.”

With a glimmer of hope in the distance, homeowners are slowly regaining confidence in America’s once thriving housing industry. Potential homebuyers are back in the market and home prices are starting to regain traction. Though the future is unpredictable, President Obama’s bailout is helping to reverse the nation’s economic tailspin.

For more information regarding the government bailout please see the following sites.

2009StimulusPlan.org

Center For Responsible Lending

The New Housing Plan

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