People across the nation have been seeing the word “foreclosure” posted up in front of houses more often lately. This particular problem of people losing their homes is because of a recession that the nation is experiencing. Many solutions to solving this problem have been thought of but turned down. A possible answer for fixing this foreclosure issue is as follows: in order for people to keep there homes during this time of recession, it may be ideal to provide the home owners with extended contracts on their homes with lower payments each month, so that the contractor still receives all their necessary payments and the client can still afford to keep their house. This solution will help solve many of the problems such as people buying houses they can’t afford and contractors offering high sales rates.
The foreclosure crisis has occurred for many reasons. Banks offered subprime loans and teaser rates. They approved under-qualified people to borrow more than they could afford to repay. These borrowers, so desperate to own a home, borrowed over their means, counting on a future and now non-existent upswing of the housing market to allow them opportunities to refinance at lower rates after teaser rates expired. As the housing market fell, the banks no longer offered the refinancing that these borrowers counted on, and other economic issues caused many of them to be on even less firm footing then when they got their mortgages.
When thinking of a solution to the foreclosure crisis our country now faces, we have to analyze how this all started. People cannot afford their mortgages, and since their house is worth less than they are paying for it, now that the housing market has plummeted, why not just let the bank take their house rather than paying? The smart economic decision their by the homeowner would be to let the bank foreclose on their house and look to buy another for much cheaper. That is the problem. Due to the severe decline in housing prices, people who bought their house about five years ago are paying more than the house is worth.
It is the responsibility of the lenders to notify those who are late paying their mortgage. Before foreclosing the homes, lenders give out warnings to remind borrowers to pay their bill, if not the property is taken. The borrowers are given thirty days to pay the mortgage including the late fees. One of the main reasons people experience foreclosures is b... ... middle of paper ... ...lls because it shows a lack of responsibility on the borrower’s part. 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.
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.
Once their house becomes foreclosed on, they lose their house and become homeless if they do not find another house or apartment in time. With the economy in a recession this problem is becoming worse with people losing their jobs and having no money. The important thing throughout this foreclosure crisis is to keep people in their homes and not on the streets. This is a very complex issue to find just one solution that fits everyone. One solution is that in European countries they are doing 50-100 year mortgages which would allow people to have lower monthly payments, but this is not yet a standard practice or popular in the United States.
Inflation has robbed too many homeowners (and non-homeowners) of their savings, making the money they do have of little value. Many Americans have had to tap into or deplete their savings to meet everyday expenditures. The government has put many programs into action and most with good intenti... ... middle of paper ... ...ss likely to flourish if they know someone is watching them. 5. Review any second mortgage requests from homeowners that have been in their homes 20 years or more. This would help protect the elderly.
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.
With today’s seemingly never upturning economy, there comes’ many problems that affect millions of good American people. From job loss to poverty increase, from overdue loan payments to a hard-working man moving onto the streets. These are all real problems today that all go back to a failing economy, and the result of this collapse is loss or foreclosure of a home. To fix this problem, the government is going to need to come to an agreement on a solution; one that will give these people who lost their homes a place to live and even a source of income. They are going to need the help of private investors and home buyers working together to fix this very serious predicament.
After two years of straight interest payments, and pure profit for the financing company, the loan payment begins to escalate. So, the consumers dream home must be sold or refinanced in order to avoid the cost of the outrageous increasing payment to the greedy lenders. These loans helped the mortgage companies do well, but the dream home will cost more than ever dreamed if the loan is kept. For the stressed out homeowner this payment is often unaffordable and although the corporation may do well the consumer is left in d... ... middle of paper ... .... This mindset needs to be changed in our society because it is a stressful and deceptive way of life.