Mortgage Loans Research Paper

Mortgage loans are loans that are secured by property such as houses and are funded by banks and by the federal government. In return for the money given to the homeowner, the bank or federal government gets a signature saying that the homeowner will pay back the money in a certain time period. Mortgage loans can be beneficial to both homeowners and the lenders such as banks and federal government, but it can also be harmful for the banks and the federal government for losing the trust of the homeowner. If banks issue more mortgage loans across the country, then it could lead to the banks downfall as well due to people not being able to pay their dues and therefore resulting in properties going into foreclosure.

This issue of non-payment of

The major cause of this is people not being able to pay their dues on time. This process leads to foreclosure which has become a major problem in the United States. An economist reports that about 2 million homes are in the midst of being in foreclosure (Daniel Hartley, 2010). Foreclosed homes sell at a discount which is bad for the economy and foreclosures have a negative impact on the value of homes nearby (Daniel Hartley, 2010). As the number of defaults on mortgage loans rise so does the threat to the economy towards a downfall.

The home mortgage loan industry which is located in the United States is a business that was one of the causes of the major financial crisis that occurred in the 2008 and lasted for about a year (Kai Wright, 2009). In this time period, the average loss on a foreclosure was about $130,000. These statistics show how bad it got in this mortgage crisis era triggered by the number of foreclosures. This all could have been prevented if homeowners were able to meet their commitment of payments in its due

They are affiliated with homeowners, and they work with their loans (James Kelly Jr., 2014). The majority of these loans that are given around the United States also come from private partnerships with government agencies. Some examples of private partners are The Federal National Mortgage Association and The Fair Housing Administration.

Mortgage loans have been extremely tight since the mortgage crisis has occurred and it is not benefiting the economy. This crisis has been a learning experience at many levels (Dale A. Whitman, 2014). As time has passed, the number of demands on loans have hit a major increase since the mortgage crisis. Graphs and statistics helps the United States understand how big the mortgage crisis was as the major reason for the economic slowdown. It shows a correlation in that the number of loans given in this time period with the money lost over time.

The U.S Federal Housing Administration has a huge role in the housing finance. They have insured over thirty-four million mortgages in the United States since 1934 when loans started (Sierra Sterling, 2014). This insurance program is one of the key points of homeownership opportunities in the United States. In addition, these administrations contribute to the final approval on these loans as well. This benefits both the insurance program and the homeowner if they both fulfill their necessary requirements for these