With foreclosures, investors loose money and cannot afford further investments. With fewer... ... middle of paper ... ...ney matters. It is better to wait and force yourself to save enough to be ready and able to buy a home. Then you can live contentedly knowing that you can pay for it and not constantly fear foreclosure, uprooting your family and the possibility of becoming homeless. I also think a law should be passed about the degree to which a bank can vary from the prime rate, and should include a formula of basic borrower qualifications to help keep this crisis from continuing as more homes are sold in the future.
When thinking of a solution to the foreclosure crisis our country now faces, we have to analyze how this all started. People cannot afford their mortgages, and since their house is worth less than they are paying for it, now that the housing market has plummeted, why not just let the bank take their house rather than paying? The smart economic decision their by the homeowner would be to let the bank foreclose on their house and look to buy another for much cheaper. That is the problem. Due to the severe decline in housing prices, people who bought their house about five years ago are paying more than the house is worth.
Additionally, the American public needs more confidence that home prices will start to increase. Nobody wants to purchase an investment that will decline in value. The prospective homebuyers must also share blame because of the lack of knowledge most people seem to have regarding how expensive of a house they can afford. Perhaps the biggest problem faced by homebuyers is the staggering interest rate that must be paid. I firmly believe that lowering interest rates will greatly reduce the number of foreclosures.
Also, not everyone understands all of the rules an... ... middle of paper ... ... find a way out. If it means selling their house and finding a cheaper one, our government should help them do that. We say that we are so fortunate but if we were truly to unite and help one another more, this could be true. It is not usually the family’s fault that they have found themselves in foreclosure. It is usually by a technicality, a loss of annual income such as loosing a job, or an accident.
The government has to take steps in regulating these types of entities and not be looked upon as the factor of salvation in saving the banks and mortgage industry. The first suggestion to solving the problem of foreclosures would be to lower the mortgage interest to 4% across the board. This would give more people the ability to stay in their homes instead of the adjustable rate mortgage that they are now enduring which ultimately puts them into a situation where they cannot afford their monthly mortgage payments. Banks are greedy and by not giving the homeowner the above chance, they end up taking back a home under foreclosure ruling and in the end, lose out as they do not recoup the value of the home and it puts everyone in a no win situation. Based on mortgage interest rates, many first time home buyers do not realize the impact that the monthly payments will have on their net income.
This solution will help solve many of the problems such as people buying houses they can’t afford and contractors offering high sales rates. It will also help families like may aunt who move several times just to get a place they can afford. It will also help many people save their homes and keep them from being homeless. The majority of the nation’s problem in this foreclosure crisis is that people are buying houses that they cannot afford. Everyone knows that when it comes to buying a house for the first time that it’s a major accomplishment for him or her, but some people in the nation do not seem to consider their salary when it comes to buying a home.
This is a special circumstance—it is a crisis. This shouldn’t be expected to happen every day just because a property value goes down, but this is a rare instance where America needs help! After implementing this program, banks can then reduce the number of interest rate and payment modifications, short sales and deed-in-lieu approvals. Homeowners having difficulty will be able to sell their homes to more buyers. Currently, in order to get out from under a home that one cannot afford, he must attempt to do a modification to make the payments easier to afford.
Like cars, kids, pets, gas, and leisure. Yes, everyone wants to buy that first home and have something to call their own but is it really in the cards right now? For most it should not be, yet the mortgage companies are more worried about gaining a buck than if that person in ready to buy a home. One way the lending company’s can help is to make sure that their credit cards are paid off, or with low balance. Doing this can insure that people are not living off credit cards, paying the balance just to run it back up.
Homeowners are faced with difficult financial decisions. Impulse buying and extravagant purchases that were made because it was affordable at the moment are forcing home owners to become statistics of the declining economy. Among the many problems they face, they are also being forced into foreclosure and losing their homes. From the beginning consumers and the banks overspent and overstretched their budgets. Consumers gave into the game, and the financial institutions gave into the greed by not ensuring that their customers were 100% qualified.
The first step in solving the foreclosure crisis is to stop lending money that we cannot afford to pay back. Lenders are greedy and they just push people into loans that are too much for them to handle. Once the lending portion is under control then we must take care of the current problems, which are all the people that currently have the loans that they can’t afford. Stop lending too much money! A person should be able to make the monthly mortgage payment with one and a half weeks to two weeks of paychecks.