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.
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.
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.
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.
The problem with this system is that when the housing market is down, the banks cannot sell the house, and lose money in the deal. When banks lose too much money, they are either bought out, bailed out, forced to fire employees, or close down completely. As a result of the current economic situation, foreclosure is leading to banks going bankrupt; when the economy is doing better, foreclosure is less of an issue. This is because people have the money to pay their house bill when they have steady jobs with decent hours. This is not to say that the economy causes foreclosure, it just leads to it when people make irresponsible choices.
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.
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.
The credit score is the reason a lot of people are not able to refinance their homes. The credit score should not be the determining factor. Other factors should include the longevity on the job; the ability to pay the loan at a lower amount; a lower interest rate; consolidating other debt with the mortgage loan and converting ... ... middle of paper ... ...n afford to have it placed on the loan at the onset. The Private Mortgage Insurance (PMI) should be eliminated after the homeowner has made payments on the house for two years. Although the insurance is used to help the mortgage company in case of default, it can be an unnecessary burden on the homeowner.
We are not satisfied unless our homes and cars are better than those of our neighbors. This idea of wealth and the value on material possessions instead of family and a job got all of us into the problem. Now everyone needs to do their part to stop it again. Ideally, the current foreclosure crisis that has affected all Americans could result in a cultural shift to value family security and fair business practices over possessions and net worth. I believe that this plan would help to stop the foreclosure crisis and possibly prevent one in the future.
In other words, were the buyers really qualified by today’s standards to borrow or did they just have some carrot dangled before them that was too good to pass up whether they could afford it or not? 1. If not, foreclose on that property and don’t look back. We’ll address what can be done with those properties in a moment. The buyer most likely bought too much house for the income they had and knew it.