Banks can see the monthly mortgage payments as payments to the loan, plus as income for renting the home out. This way the homeowner still has title to the home, which gives a incentive for them to co... ... middle of paper ... ...d to fund programs in their own communities. This form of property buying is not limited. The major issue of the crisis in the first place is that people are not able to afford the mortgage. If we were able to take the mortgage out of the picture and make homes rent able and one day own able to the people that stay throughout the long term renting of the homes.
When a mortgage company or bank gives out a loan to someone, they set the interest rate f... ... middle of paper ... ...make their payments until the car is paid for, or they decide to trade it in on another one. That should be the case for homes also. People might just have to live in them longer than they anticipated. The truth of the matter is, a lot of people got greedy. Everybody was trying to benefit from the real estate market and mortgage business.
The solving of this foreclosure crisis that is now plaguing our economy and our people involves examining the past, taking important steps in the present, and changing our policies and our thinking for the future. Perhaps the greatest cause of this incredible problem was our nation’s lack of foresight. The country did not dream that the values of houses and properties would decrease so drastically, and thus we treated the buying and selling of houses as something that was almost insured, stable, and guaranteed to continue to rise when it clearly is not. Many consumers were approved for mortgages with minimal proof of ability to pay it back. The government also bailed out failing banks after it became apparent that their current way of lending money was leading to crisis.
So the foreclosure crisis is believed to have started because no down payments were made on mortgage loans and banks were giving out subprime loans, or a loan that is given even though the borrower was not qualified for them. To make sure everyone understands the loan system, I will explain very briefly how the loan system works. A borrower requests for a certain amount of money from a bank for a loan. Often times this is done through an application. They provide employment information and a credit check is involved in most circumstances.
No new fees of any kind that will only put money in the bank's hand and take money from the homeowner, who is the one that we should be trying to help. The new price adjustment should be made to the old loan without any cost at all to the homeowner. The h... ... middle of paper ... ...stronghold that the medical insurance and providers have with their strong lobby in Congress. However, I think in the next four or six years the American people will clean up the house (Representative and Senate) enough to finally get some bills passed to help the American people instead of American Big Businesses. Only then will this country not have to fear going into another finance disaster like the one that we are going through now.
The first step that I stated was to eliminate some bad legislation. The concept that banks would loan money to people who cannot pay it back is absolutely ridiculous, but it continues to happen all the time. Freddie Mac may be the underlying legislation that has been the main problem however there is rarely just one piece of legislation that is the problem. I believe that it may be a web of legislation in the housing market that my need to be rewritten. This removal or rewriting of the legislation would allow banks to lend to people who they know will be able to repay the loan, and continually make payments towards the mortgage.
Today there is a big problem in our society, foreclosure. It is something that is slowly working its way up the financial chain. Middle class families are finding themselves in this situation more and more everyday. They think that they will be making enough to pay off mortgage but something comes up. Accidents, identity theft, loss of a job, many things can happen to a person putting them in not only in a bad situation personally but a bad financial situation.
This would also satisfy the bank because they would be getting some money monthly instead of no payment. It would also help me to keep my credit rating status quo. I realize that the concern would be that the homeowner would not be able to pay off the note when due and it just delays the inevitable. Here I would suggest that in order to get the interest only loan the homeowner must open a savings or CD or IRA account where they can save some money for the future to put towards the house. I’m not a financial wizard, but I think that would benefit the homeowner and the bank.
With a little creativity and a few concessions from both the mortgage lenders and borrowers, the American Dream of homeownership can survive. The real-estate market as a whole would benefit from a solution to foreclosure as fewer foreclosed homes on the market would help restore property values for all American homeowners. The drop in the real-estate market was inevitable as home prices were over-inflated due to mortgage fraud and loose credit, but we must get a grip on the foreclosure rate and stabilize the market. We as a nation need to learn from our mistakes and regain control of the mortgage industry. As always in America, if we work together to solve the issues faces by thousands of American homeowners everyone involved will benefit in the future.
The same banks that approved excessive mortgages are foreclosing on individuals who are unable to pay their mortgage. The overall economic situation ha... ... middle of paper ... ... all true in theory, theories don’t help when there is an immediate crisis which affects real people. We could do nothing, sit back and wait for the equilibrium but I don’t think this takes into account the periphery aspects of society which are affected. The government can either help keep people in their homes or they can help them via welfare and subsidized housing. By taking steps to assist in obtaining equilibrium, we can prevent an even farther downward spiral.