When the foreclosure crisis first began, there was a lot of finger pointing mostly at the supposedly “irresponsible” homeowners who “bought too much house” in a quest to keep up with the Joneses. We were even treated to televised rants about how “good people” shouldn’t be forced to pay for their bad neighbors’ financial decisions by saving them from foreclosure. Now that was back in 2008. Since then we’ve learned that it wasn’t that these homeowners facing foreclosure were irresponsible or bad; but they were simply good people who had been stuck with bad loans and put into a situation where they were vulnerable to foreclosure. Many of the people who in error pointed fingers at their neighbors are now also facing foreclosure and even eyeing bankruptcy for a way out of the mess.
The truth about the foreclosure crisis is that many homeowners were lured into bad loans that left them short on money and vulnerable to hard times. Many of these homeowners are facing foreclosure, not because they were careless; but because of being mislead by lenders, while others are just the victims of circumstance such as a job loss. It is important that our legislators and governmental leaders step up to the plate and treat the victims of foreclosure with compassion. If we intend to stop the foreclosure crisis from worsening, we must fix the Making Home Affordable program and reinforce it with other programs that actually work. A reasonable period of forbearance for homeowners who have suffered a job loss would be a good start.