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financial literacy and poverty essay.
financial literacy and poverty essay.
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For hundreds of thousands of homeowners across the United States it is increasingly difficult to believe in the guarantees of life, liberty and the pursuit of happiness as the American Dream of homeownership evaporates along with jobs, retirement savings, college funds, and home equity. It is time to take action so that many Americans can save their homes and would not face the dreadful reality of being kick out of a house they had own for years. The most probable way to solve this crisis is by having a short term project and a long term plan.
The immediate plan shall be used to help the homes that are already foreclosed or on the brink of foreclosure. The long term plan should be focused on future homeowners so that such a crisis never occurs in the future. It would indeed be unjust to throw out families that have been living in the house for 10-20 years. Hence, the property that has been foreclosed should not be auctioned but rather rented to the same family. Most of the time this rent is cheaper than the mortgage payment thus leaving a family safe without the risk of becoming homeless. However, this leasing of the property should not be concurred if there is a possibility of loan modification. Hence, every family that fears that there might be a chance of them falling out of payment or would not be able to make payment for next month; they should immediately contact their banks/lenders. Most of the times lenders will be able to help out a new and convenient plan for the borrower without the risk of losing his/her home. If the lender is unable to be of assistance and if the borrower feels that there could have been a better loan modification then the best option is to go to a home counselor, who is available in every state. Hom...
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...the properties can be brought down and can become affordable to the population at large. For example, the government can heavily fine houses that are vacant for more than three months after foreclosure. This way the foreclosed homes would be forced to be sold by the lenders on the best offered price or would have to be rented out to people on reasonable prices. This will bring down housing prices and increase the chance of people to own homes and have affordable mortgage payments.
There is a strong need for people to understand what they are going through and work out the best possible solution. The borrowers and lenders are the only one who can work out together to prevent harm on both parties. The borrowers’ needs to keep in mind about what they are getting into, and the lenders should be of assistance to the borrower rather than just thinking of hollow profits.
other over borrowers face is that when they are faced with unforeseeable events and financial
From time to time, lenders and their attorneys announce that lender liability is no longer an issue with which the lending community needs to be concerned. What usually prompts this proclamation of the death of lender liability is a recent case in which a court has summarily rejected a borrower’s claim that the lender violated the duty of good faith and fair dealing. Many courts have rejected borrowers’ lawsuits which are based on allegations of the violation of the lender’s duty of good faith. Nevertheless, lender liability should continue to be an area of concern to lenders.
The last quarter twelve percent (12%) of American homes are in default of their loan, or in foreclosure. Add that to the previous four quarters and that is eight point seven (8.7) million homes in crisis. (Further on known as HIC's) The United States “Bail Out” helped major mortgage corporations, and their chief executive officers (CEO's), but not the families that are in, or were in these HIC's across America.
of things to take into consideration when chosen to do student loans. The author argues
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens.
One cold morning Sam Black woke up with aching chest pain. Troubled by this new condition he went to see his Heart Doctor. Little did Sam know that hours later he would be lying on the operating table in route for a triple bypass surgery. The surgery went as planned, but it was not the last of them. Sam was sent to many specialists and rehabilitation centers, building a large bill, which they had no money to pay them with. He still pays several grand a year for the medication he is prescribed. Years after the operation Sam and his wife, Elsie, have narrowly escaped foreclose, however the most problematic debt they have is the hundreds of small term loans with interest rates in the triple digits. Elsie once said in an interview regarding the loans they had to take out, “You can’t really keep up with them” (Wright, 2011). Almost a decade later Sam has trouble speaking and has to carry around an oxygen tank. This is a normal couple that got caught in the continuous cycle of payday loans. Like other millions of Americans The Black family settled for shady overpriced short-term loans.
I wonder if as a family opens the door to their new home, a place where they have holiday dinners, celebrate birthday parties or just are able to say “Home”, understands the importance of their investment. One of the most important investments in a person’s life is purchasing a home. Whether it’s a first-time home buyer or a veteran, buying a home is a complex process. Figuring out how much you can afford, learning your rights, shopping for loans, these are a few steps in the home buying process that when learned correctly, can produce a successful homeowner. Learning how to take care of something as special as a home takes time and effort from all those who are present in the home. As the country deals with the economy and the war, the last thing America needs is more homeless people and the rise of the crime rate. Two ideas I have come up with to help solve the foreclosure crisis is to add a investment course to the high school curriculum across America and insurance companies creating an insurance package that consolidates home and auto insurance at an income base rate.
So, perhaps the problem with this ongoing issue is not merely what happens to those who have paid their loans for years or its effects on tax payers, but giving hope and life back to those who are lost in debts, those who cannot afford to have a simple basic life, those who have lost their career dreams because of some accumulated loan they have to repay and for fear of loan repayment.
make the reality of homeownership possible to those that otherwise would not be able to
The foreclosure crisis has been devastating. Families no longer able to afford mortgage payments are forced into bankruptcy, while banks find themselves with properties valued at less than the loan principal. Solutions proposed thus far have primarily focused on loan re-modification measures that only slightly relieve the financial burden for homeowners and frustrate lenders who are forced into less attractive loan terms. However, one solution not being discussed in congress may resolve the housing market slump while benefiting families and investors alike.
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.
As of December 29, 2009, the website Foreclosure.com reported that over 2.2 million homes in the continental USA are in some form of foreclosure, 486,323 are in pre-foreclosure and 465,490 have already been foreclosed. Over seven hundred thousand have tax liens against them and 87, 389 have been sold in Sheriff sales. Along with the homeowners, mortgage companies and banks have suffered tremendous financial loss. However, the homeowners lost so much more; they not only lost the roof over their heads, but memories, their self-esteem and their piece of the American dream.
The classic american dream is comprised of a successful job, a car, a family, and a perfect house with its white picket house. A house ownership is the sign of a source of income, stability, and a future asset for generations because it could be used for collateral, as a rental property, or a home without having to pay a hefty mortgage. Housing is the key to having the necessary stability in order to give the poorest people in our community a chance to break away from their socioeconomic level. In addition to better safety net government programs, it is important to create accessible housing opportunities for those who cannot afford housing in order to relieve poverty in the United States.
12. Trouble Loan: A discussion of the preferred procedures for detecting, analyzing, and working out problem loan situations.
The study defines “default” as a risk to the repayment history of borrowers where the borrowers have missed at least three installments in 24 months. This shows a symbol and indication of borrower behavior that will actually default to cease all repayments. This definition does not mean that the borrower had entirely stopped paying the loan and therefore been referred to collection or legal processes; or from an accounting perspective that the loan had been classified as bad or doubtful, or actually written-off (Pearson & Greeff, 2006). While, McMillion (2004) states that default is the risk where the borrower is unable to pay the loans. Default risk increases if a borrower has a large number of liabilities and poor cash flow.