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. Mortgage companies are allowing families to take out mortgages that they may not be able to pay back if something were to happen in their family. There are many different options to consider, but one way to help fix this problem is raising the estimate family income for a mortgage. This would be difficult for some families that are trying to get a more expensive home but it will help them too by avoiding foreclosure. If they were to decide on a cheaper home that would mean a smaller mortgage and less they owe someone else.
Yes it is the most important or should I say the most expensive but we have other bills and needs too. So if we put all our money in one pot we will eventually lose that pot and we then have nothing and that is when we go into foreclosure. So we must get a handle on the lending before we are able to attack the foreclosures. The banks and lenders are not all to blame we share some of that blame for accepting the loans that we could not afford. But it is very hard to say “I can’t afford this house” after the banks or lenders have said that you can.
So we are forced to do it the conventional way by getting a loan. An investor ... ... middle of paper ... ...at will allow the final price closer to the asking price. Now the buyer can afford their new home. There should be more non-profit organization that can assist the struggling home owners to restructure their delinquent mortgage without being charged for it. I have seen and heard many people complain that when they attempted to get assistance from a company that is supposed to get them out of the foreclosure problems they are charged a large fee.
Empty houses hurt the community, making it less desirable to live in. Also, when banks loose money from foreclosure, they pass on the expense to new borrowers, making it harder to afford houses in the community. The economy in general is hurt by foreclosure because debt is a commodity which is sold and incorporated into investment packages. The idea is that when the debt is repaid, the interest paid on it is the financial incentive for the investment. With foreclosures, investors loose money and cannot afford further investments.
One major issue that the foreclosure crisis faces is that many homeowners are not able to pay off the rise on the monthly payments on the mortgage that banks proclaimed in contracts. One way for the bank to not have to take back homes is to offer an expended loan with the old monthly payments before the increase. By expending loans, banks do not have to repo homes and sell it off dirt cheap. Also selling a home in a down market just drive away home buyers who cannot even take a loan out from the bank because of the empty reserves that most banks had. Banks can increase the interest rates on the homes but lower the payments so that it is more manage able for the home owners.
I believe this plan will decrease the percentage of foreclosure and help people keep their homes. An extended payment plan for eligible people is one idea but what about people who aren’t eligible? What about the people who simply can not afford to pay their mortgage or afford a down payment on a cheaper place? Or what about the people who have bad credit or no credit due to an unfortunate event such as identity theft? Many people put a lot of money into a home, then some incident comes along making keeping up with payments more of a challenge, but is it really unfair that their home ... ... middle of paper ... ...e doing the responsible thing in the process, the amount of missed payments should affect credit because the Person didn’t immediately take the actions necessary when they knew they would soon find themselves in a financial hole.
More or less the people who are homeless and out of jobs now, have realized where they have gone wrong in their funds a... ... middle of paper ... ...ters into buyers through education and techniques, and then we will have buyers for the foreclosed homes. Overall, banks do not want to take back any more homes then they are able to do, therefore the investors are called in to help ease the flow of homes in any market condition. Realtors help price homes at reasonable prices forth the benefit of the seller. Banks have witnessed the largest error in their felid of expertise and have undergone many changes to heal it. The homeowners have to realize that for their own benefit, if they are educated in financial terms, they can be more aware of what to do in certain circumstances.
Some people can simply not afford to buy a home, and these people must be screened out during their evaluation to keep the bank from having to foreclose on them in the future. Although banks want to lend money to these people so that they can make money on the ... ... middle of paper ... ...to these people and to the market would be far less than the long term problems that will be caused by the government or the banks intending to bail them out of the debt they incurred. The government and banks cannot afford to bail out everyone who is in debt so some of them must have their homes foreclosed. The banks cannot wait on for people to repay the loans on several homes at a low interest, long term loan. They simply must foreclose on some of these homes and hope to make some of their money back in the sale of these homes.
This mindset needs to be changed in our society because it is a stressful and deceptive way of life. Without much knowledge the public is preyed upon by those getting rich on the interest paid, along with late fees and other fines. Then, besides the mandatory modification the homeowners with a loan problem should also be given government tax incentives, credits and other incentives to stay in the home for an extended length of time. There is no short term fix for all of this of course, but I have made the proper suggestions to do away with all the brown front lawns void of Christmas decorations this year. One of them belonged to my now displaced family and the hardship is one reason I am seeking money for my education.
Due to the lenders greed, that itch to make a buck, it appeared that anyone and everyone were being approved for a mortgage regardless of their income. Now with the changing economy, layoffs and unemployment, the higher mortgages that were manageable are now unable to be paid and forcing people into foreclosure. Now after the “big guy” got their bail outs, they claim to be able to finance more mortgages and loans in an attempt to regain customers. However, due to the federal funds, there are hefty and strict regulations. The banks are now better off.