Foreclosure is the process by which an estate that was provided through a mortgage is taken over by the lending company. This has the effect of denying the owner the right to inheritance, for example, the owner is not allowed to redeem the estate. Currently, there is a dramatic increase in foreclosure cases, with more than 4% of America's 120,000 homes in foreclosure. Although some homeowners are able to resolve the problem, the majority face it because they are late or very late in paying their mortgage. The foreclosure process begins immediately once the homeowner misses their mortgage payment on time. Failure to pay within the stipulated time may be due to unemployment, divorce, medical problems, loan terms and death (Laing, 2009). Foreclosures are the current threat to the U.S. financial market and economy. Publicity of foreclosed homes that are sold leads to lower home prices and a decline in the value of homes located in neighborhoods. Because of this, consumer spending has seriously suffered and the situation has worsened the financial crisis as Americans watch the value of their valuable properties, their homes lose value. The same experience was observed for $1.5 trillion of subprime-backed securities and the value of the same mortgages steadily declined, causing most banks to lose capital at a faster rate than the rate at which the government replenishes them as planned by the government. Troubled Asset Relief Program (TARP) (Laing, 2009). In an effort to find a solution to the crisis, the Treasury Department has proposed urging banks to make mortgage loans low, around 4.5 percent. The step was considered... middle of paper ...... would provide a win-win situation for the government and the owner. Works CitedArmour, S. (2009). The foreclosure crisis extends from subprime mortgages to subprime mortgages. Retrieved December 17, 2009 from: http://www.usatoday.com/money/economy/housing/2009-06-08-home-loan-foreclosures-subprime_N.htm.E1Boghdady, D. and Cohen, S. (2009 ). The growing crisis of foreclosures. Retrieved December 17, 2009 from: http://www.washingtonpost.com/wpdyn/content/article/2009/01/16/AR2009011604724. Grow, B., Epstein, K., and Berner, R. (2009). How banks are making the foreclosure crisis worse. Retrieved December 17, 2009 from: http://www.businessweek.com/magazine/content/09_08/b420034085635.htm. Laing, R. (2009). How to solve the foreclosure crisis. Retrieved December 17, 2009 from: http://online.barrons.com/article/SB122853114366984933.htm#articleTabs_Panel_article%3D3