Imagine a young couple was married and bought a house together. They were happy they made an investment together that they would never regret. A few years later, the company the husband worked for suffered critically by the recession and he was one of the hundreds of people who got their job cut. They now have two babies to feed and have to choose between food and the mortgage. They soon began to miss their monthly payments. They waited until things became unbearable to negotiate the loan or an extension to repay the bank but their efforts failed. Another family had a home, they had an adjustable rate mortgage, the two year introductory rate is almost expired and the payments are nearly impossible for the family to pay. The family tried to get out by selling the home but the balance is now worth more than the home and with no other options in sight, the foreclosure sign hung in front of her home.
These stories are now common in America. Many Americans face a huge crisis that they never expected. Many put the blame on the banks while others put it on the borrowers because they should have “done their homework” and research in detail the loan they were about to commit to. However based on extensive research, I concluded that there are several things that contributed to this foreclosure process, thus making several ways to resolve this growing problem.
In order to fix the problem, it’s imperative to know what caused the crisis, not only to prevent it from happening again but also to use the most effective way or ways to address the problem at hand so that it will help the home owner in the end.
There are five reoccurring reason of foreclosure (shown left). The most prominent reason of f...
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...to the bank.
The government should also make a law that if someone wants to buy a home they need at least a five percent down payment. That way the balance will not be high, thus the monthly payments will be lower and more affordable to all Americans.
However this program would be very effective if those who are at risk seek help before they start missing payments. The banks will be more willing to work with these people if they did not ruin their credit score before trying to negotiate. In addition, it will make the job easier for those who worked in the program and quickly solve the issue before it is too late.
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