We cannot generate new money, unfortunately, for those who do not have it. House payments can only be made so cheap, and people who are unemployed can only stretch their dollars so thin. Because of this, we must find the solution to the houses that sit empty, while banks and loaners shell out payments for them. The solution to those houses sitting empty while being paid for is to enlighten the public on how much cheaper it actually is to buy a house today, compared to before the economy tanked and after it picks back up. Time to buy foreclosed houses is limited, it is only inevitable that the economy will soon improve.
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.
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.
No one wants a recession, so in order to give the economy a shot in the arm, interest rates began to fall again in an effort to tempt people to purchase new homes. Interest rates are continuing to drop and mortgage lenders are trying to coax people into refinancing their current property in an effort to generate business. The fees that were necessary in the 1990s have been pretty much eliminated as lenders compete for business. In addition to getting a lower interest rate, there are many other reasons why people choose to refinance there homes. Another popular reason is to take some of the equity out of their home in order to make a major purchase or complete a large project within their existing home.
This is a special circumstance—it is a crisis. This shouldn’t be expected to happen every day just because a property value goes down, but this is a rare instance where America needs help! After implementing this program, banks can then reduce the number of interest rate and payment modifications, short sales and deed-in-lieu approvals. Homeowners having difficulty will be able to sell their homes to more buyers. Currently, in order to get out from under a home that one cannot afford, he must attempt to do a modification to make the payments easier to afford.
After all, the first step in solving the foreclosure crisis is to keep new people from finding themselves in the unfortunate situation of owing more for their house (mortgage) than they can afford. When a person is able to afford their house, they are able to consistently make the respective mortgage payments. A funny thing about money: Although you can’t take it with you when you die, you do need it to live. However, people must live within their means - a person should buy within what they can afford to immediately pay for and work towards creating a savings account. This is the secret to avoid finding yo... ... middle of paper ... ... ways to avoid foreclosure and lessen the overall amount of individuals whose houses are foreclosed.
Adjustable rate loans or loans with a huge balloon payments were not seen as potentially unaff... ... middle of paper ... ...s more opportunity to live within their means, possibly even saving for a twenty percent down payment and buying a home they can actually afford. While no one likes the idea of turning people out of their homes, when you buy something you can’t afford, you have to return it. When you make a bad business decision, you have to take the consequences. Capitalism doesn’t work when there is no downside to risk – that downside is there to make sure that the system works properly. The most sensible, soundest and, ultimately, kindest solution to the debt crisis caused by the real estate bubble is foreclosure – expedient, easy, simple foreclosure.
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.
People claim that we are now in a “new market,” but recessions are always a possibility. Millennials don’t know where they will be in their lives when or after they make a commitment to buying a home, and the effects of a recession with owning a home seem to outweigh the other benefits. Millennials are also not educated enough on homeownership. The long-term benefits of owning a home will not be evident if people buy homes that they cannot afford. Homeownership is not for everyone, and renting could be a better option for more Millennials and their ways of living.
First, banks need to stop financing home buyers for more than they can afford. Sellers need to be aware of their buyers so that the home does not go onto the foreclosure list. Second, banks must only approve mortgages for homes that have been correctly and fairly priced to preserve home values. Many Americans right now are selling their homes for a depreciated price so that they can get out before they start losing even more money. Until buyers start buying the houses at the correct value, the mark... ... middle of paper ... ....