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					“The American Dream”
of Homeownership Has
    Become Part of
 America’s Nightmare
America’s Financial Nightmare
The American dream for some people has
become America’s nightmare

Although foreclosure is only a portion of
the United States’ financial problem, it
stands in the center of it all

The housing crises is everyone’s problem
because it attacks America’s economy
America’s Financial Nightmare
The federal government is addressing the
problem with various programs, tax breaks and
grants.

Even though foreclosure has its negative affect,
there are benefits for some people.

Ultimately, individual responsibility along with
the plans that are now in action, will help the
economy and communities stabilize over a
period of time.
           All these foreclosures
               don’t affect me
When a neighbor loses their home due to foreclosure if affects you
individually whether you realize it or not.
I.         When a neighbor loses their home due
               to foreclosure if affects you
              whether you realize it or not.

     A. The property that was lost due to foreclosure causes
     other’s property value to decrease in the neighborhood.

        Because the foreclosed property is sold at basement bargain
         prices, these prices affects the value of surrounding property.
I.   When a neighbor loses their home due to
 foreclosure if affects you individually whether
              you realize it or not.

  B. Affects current homeowners when refinancing and
  selling their property.
      Some homeowner’s property value has decreased by 25% of
       their original sale price.
      Their home has been striped of equity, leaving them unable to
       refinance.
      Positively result of foreclosure, for those that are able to
       refinance can at much lower rates.
I.   When a neighbor loses their home due to
 foreclosure if affects you individually whether
              you realize it or not.
                               C. The foreclosed
                               property can
                               become an eye-sore
                               to the community
                               thereby deterring
                               prospective buyers.
                               The property is
                               usually neglected,
                               not maintained,
                               repairs not attended
                               to.
I.   When a neighbor loses their home due to
 foreclosure if affects you individually whether
              you realize it or not.

  D. Lenders change lending practices that slow home
  sales. Not as many people being financed. Again
  attacking our economic system.
Personal & Emotional Aspects of
          Foreclosure
The financial
effects of
foreclosure are
mostly addressed
but emotional &
personal aspect
can be just as
devastating.
                           Imagine the




                                      or the class mate that loses a good
                                      friend
emotional state of a child that has
to relocate mid-school year
Possibly the high school
 junior that has to leave
all because their parents
      lost the home.
The federal government has addressed
this concern with financial grants to local
       governments and agencies.
    II. The foreclosure crises is
financially draining to the economy.
A. The federal government has granted money to
   state governments to purchase and rehabilitate
   foreclosed property.

     Grants, bailouts and even tax breaks involve large sums of
      money, therefore the foreclosure crisis is financially draining to
      the economy.
    II. The foreclosure crises is
financially draining to the economy.
  The United States Housing and Urban Development
  (HUD) started releasing funds in the fall of 2008 for the
  new program, Neighborhood Stabilization Program
  (NSP) Grants.

  HUD awarded grants to a total of 309 grantees including the 55
  states and territories and selected local governments to stabilize
  communities hardest hit by foreclosures and delinquencies. Each
  of the 50 states and Puerto Rico received a minimum award of
  $19.6 million, combined that was $3.92 billion dollars
  (“Neighborhood Stabilization Program Grants NSP1”).
    II. The foreclosure crises is
financially draining to the economy.
  Actually, there are 3 types of (NSP) grants; each
  addresses an aspect of the foreclosure crises. NSP2
  combined amount that will be awarded is $1.93 billion
  and NSP-TA for $50 million.

  NSP1’s purpose is for the assigned agencies to
  purchase foreclosed properties, rehab and then lease
  or sale them to low/moderate income families. NSP2
  and NSP-TA both address other foreclosure concerns
  (“Neighborhood Stabilization Program Grants
  Announcement”).
II.        The foreclosure crises is financially draining to the economy.

The chart is from an online
report, Money Morning that
states the dollar amount federal
government has spent on the
housing crisis as of 2008.




  Figure 1. William Patalon III, Government Rolls Out Long-Sought-After Anti-Foreclosure Program
  Money Morning (Baltimore: MD, 2008) 2.
President Obama's Foreclosure
Prevention Plan Speech in Phoenix,
Arizona - Photo Credit: FoxNews.com
February 18, 2009
The Homeowner Affordability and Stability Plan aims
to help as many as 9 million homeowners restructure
their mortgage obligations and avoid foreclosure. It
is an ambitious and expensive plan that can help
every American whether they know it or not.
The federal government has addressed this concern with
    programs to help homeowners prevent foreclosure
          Who really pays for this?




   Over and over it is mentioned that the government has
bailed out this place or another due to foreclosure problems,
 but the consideration of where and who all of this money is
            coming from has not been addressed
Who really pays for this?




  Government = You
 YOU, the tax payer!
Evaluate: How did we get here?
What are some of the reasons we (America)
   are in this housing financial crisis?

  Legitimate reason as we have always had
  such as:

  Sudden long term      Death of the “bread
  illness               winner”/spouse
What are some of the reason we (America)
  are in this housing financial crises?
                      Unemployment is on
                      the rise.
                      More businesses are
                      closing and filing
                      bankruptcy
                      Employers reducing
                      staff
                      More job seekers
                      than jobs available
What are some of the reason we (America)
  are in this housing financial crises?
Realtors and others       Individuals do not take
that stand to gain        personal responsibility
glorifying the benefits   Researching the cost
of homeownership but      involved with
not telling people of     homeownership.
the great                 Getting their own
responsibilities          independent
                          inspection of the
                          property
                          Investigating
                          neighborhoods or
                          schools
Thomas Sowell, author, American economist
and social commentator stated in the Jewish
World Review:
It was precisely government intervention which
turned a thriving industry into a basket
case....Under growing pressures from both the
Clinton administration and later the George W.
Bush administration, banks began to lower their
lending standards. Mortgage loans with no
down payment, no income verification and other
"creative" financial arrangements abounded.
Although this was done under pressures begun
in the name of the poor and minorities, people
who were neither could also get these mortgage
loans.
The federal government has again
intervened and intercepted but this
time the bad lending practices.

Lenders are scrutinizing more closely
who they lend to, which has its good
points because we know they are no
longer finding ways to get people in
houses that they cannot afford.
What are some of the reason we (America)
  are in this housing financial crises?
                      Sub-prime loans
                      Predatory lending
                      Adjustable Rate
                      Mortgages (ARMs)
                      Loan officers placing
                      homeowners in loans
                      that are suitable for
                      them
What are some of the reason we (America)
  are in this housing financial crises?
Americans indulge in     Not exercising
instant gratification    discipline
Living within or
                         Not accepting personal
beneath their means
                         responsibility
Refinance to payoff
debt from credit cards
– to the point of
striping equity from
their home until there
is no more
Not all bad comes from when a
     person loses a home
       due to foreclosure,
 depending on the situation.

Relieved of stress and the burden of
homeownership
Now they can pay their bills and other financial
responsibilities that they were not able to pay
before.
Not all bad comes from when a
     person loses a home
       due to foreclosure,
 depending on the situation.
When people pay their bills it helps to
stabilize the economy

They rent property from others (keeping it
occupied) and assisting them with their
mortgage payments
Not all bad comes from when a person loses a home
  due to foreclosure, depending on the situation.


It is a buyer’s market

Large inventory to
choose from

Lower prices

Lower interest rates
Not all bad comes from when a person loses a home
  due to foreclosure, depending on the situation.

Special federal tax
credit available for
first-time home
buyers
Just like every nightmare, a person has to wake up
eventually and America will awake from theirs.
Homeownership remains part of the American dream for
many. People will have to be more patient and diligent to
obtain it. For others, home ownership may not fit into
their lifestyle and renting is just more convenient and/or
affordable for them.
After tax payers pay this bill, maybe the
responsible parties would have learned
their lessons. Hopefully, no longer will
others look down on those for not owning
a home but applaud them for living within
their financial means. It is unfortunate
that everyone was not the cause of the
problem but everyone will have to pay for
the solution. There is no place like
America, freedom to make a mistake and
everyone to help you pay for them.
Thank you for your time,
    Nikki Thompson

				
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