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. But by decreasing payments and increasing interest rates on people who are struggling to pay their mortgage, it makes it so both parties receive a victory, the bank gets its money and the person gets their chance. Foreclosure is definitely a reoccurring predicament that continues to be a home owner’s worst nightmare. It is not an easy dilemma to abolish, it is definitely one that needs a lot of thought put into it, but immediate action must be taken to protect people from losing their homes. Many existing ideas have aided home owners from getting their houses foreclosed upon, but I hope my ideas can aid in the process even further.
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.
If they were to decide on a cheaper home that would mean a smaller mortgage and less they owe someone else. The sooner a person can get out of debt the better because you never know what is going to happen. Like I mentioned earlier, accidents and identity theft happen all the time and you never know if or when they are going to happen to you. Nothing is worse than being in debt and not having a source of income. The government has set up programs such as HUD homes for families that are less fortunate than others.
This may be true in some cases but it is not fair to penalize the mass of people who are not able to pay their bills on time because of the select few who take advantage of the government. Some effects of the foreclosure crisis are due to the loss of jobs, short pay periods, and interest rates. Job loss and unemployment are the main sources for the cause of the foreclosure crisis. Having a job is one of the main resources for paying a mortgage. So the fewer jobs the economy has the more foreclosures will occur.
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.
If we do not fix what we have done in our past, now, we can never change what we will do in our future. This makes sense at any level of change and development when you take a deeper reasonable look at problems. Recently, I have heard that it is the Realtor’s fault for the soaring prices of homes for sale in many communities. I have also heard that it is the banks fault for lending out more mortgages than they are allowed to, therefore causing an eruption of foreclosed homes. Another great fault was caused by many people who went out and purchased homes when they did not have the actual funds to.
Another way that could solve the crisis is to have the banks modify all loans and lower interest rates to whatever it takes fo... ... middle of paper ... ...ecting not only those who are foreclosing, but the nation around them. It leaves open space that could be used and wasted money sitting on land. The banks could be making more money if they do not foreclose than if they do. Giving people opportunities to pay off their mortgage helps America as a nation and helps people grow and learn from their previous mistakes. Giving people rights to their property and then taking it away because of unemployment and possibly excessive spending makes our nation looked down upon.
Foreclosure is the result of mortgage loans being given irresponsibly to people that can’t afford them. Who is it at fault for this? Well the banks giving the loans and the people taking the loans are to blame. They should not have speculated about inflation in the future or their ability to cover those loans. This is why foreclosure and economic crises seem to always coincide; as soon as the economy takes a dive, spending falls, inflation slows, and peoples’ ability to pay their bills and mortgage go out the window.
After this the borrower’s could either, not afford to pay the loan back or felt that they were wasting money by paying it. Instead they just walked out and left the home to the bank. If they did walk out, this was a violation of the terms which some were not aware of or did not care. This carelessness then put the lender at risk because they had lent the borrower more than they could pay back and were at a loss. Since we entered the Iraq War, we have been slowly going more and more into debt.
Loaning substantial amounts of money to people who have no way of evidencing that they are capable of paying off loans is a reckless practice. However, if renters can show that they have paid their rent on time every month in addition to showing the ability to hold a job for a long period of time, the number of foreclosures will decline. I believe an increase in the value of the United States Dollar is critical to the housing market. When the value of the Dollar decreases in value, people are forced to pay more money in order to acquire goods and services. Consequently, the price of homes increases, limiting the base of prospective homebuyers.