During the last years the United States has been suffering in the economy. We have experience many downfalls in the market that are affecting the homeowners today. We need to find alternatives and innovative ideas to solve the foreclosure crisis. As a homeowner, I believe we can find solutions to help the consumers who are struggling because the economy is struggling.
We need to educate consumers when buying homes and explain to them the different loans available before they get into debt. The banks today need to be force to establish a true lending disclosure where a person who is applying for the loan understands all the terms and conditions. Many banks in today’s market are not held accountable for misleading their customers. They need to penalize them when they take advantage of people who cannot afford a high interest loan or a balloon loan. If the consumer understands ahead of time the terms and conditions, they would probably not go into a loan that they would not able to afford.
Incentives should be given to the bank after a period of time where they would be able to get a bonus is a person qualifies for the loan based on their income and if they keep making payments on their loan. This incentive would probably encourage banks to work with their customers and offer them a more competitive loan. The banks should offer a standard interest based on income and credit score. This standard rate should be equal across the United States. If the person knows ahead of time what is expected based on credit scores, salary and debt, then they will probably make better decision when buying a home. If a scale is made similar to the scale used to determine eligibility for food stamps and Medicaid, people would have a b...
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...ant to forgive the additional charges made to the loan. If the customers takes advantage and does not pay for the mortgage then the bank can offer to take the home bank and rent for an amount they can afford based on a standardize formula used across the board for everyone. This way they would not be able to loose all the money and after a year they can offer to regain back their home if they paid within the 12 month period on time. This opportunity will give the customer the opportunity to make better decisions and would not be homeless. I believe we have to educate our society more in how to buy and take loans for homes to avoid the foreclosure. Most people get a driver’s license and they understand what is needed to get one but when they are buying a home they just sign and have no clue about what they are doing. Let’s educate, to gain back our society.
We have insurance for the actual home, yet none exists for the most important part of keeping one of our most valuable possessions: the monthly payment. I firmly believe that everyone should be required to purchase mortgage insurance when he/she buys a home. The premium would be included in the monthly payment. For instance, twenty (20%) percent of the monies would go toward the loan, and then ten percent (10%) of the total loan would be contributed to insurance. Then, if the mortgage holder loses income, the mortgage would be paid for one year or until the individual sought employment or reliable income. During the period of unemployment or lack of income, the holder can also apply for a $5,000 grant to start a new business (monies granted must accompany a business plan and are subject to approval). After the one-year period, the t...
The real estate industry is thriving with approximately sixty-eight percent of all Americans being homeowners. With low interest rates, 1st time home buyer down payment assistance programs, and government funded educational opportunities (i.e. the Home Ownership Center of Greater Cincinnati), the real estate and mortgage lending industries will continue to flourish. However, there are some unethical lending practices that are threatening the housing industry as a whole.
Countrywide’s ambition to help more Americans take part in the “American dream” of homeownership was a noble gesture. However, as noble as the goal was Countrywide failed to protect themselves and the same people they desired to help. The demographic of borrowers Countrywide marketed to were specific: low-income and minorities. Countrywide saw a need and a wide open opportunity to make money, however, they also took a large risk with offering loans to borrowers that would not have met the standards for a “traditional” loan. At first the borrowers were able to keep up with their loan payments (the economy was stable and the job market was solid).
To solve the foreclosure crisis we must take a multi-pronged approach that tackles the issues making the situation worse and that caused the problems in the first place. Our goal is to do this in an efficient and time conscious manner. Any solution is going to have its positive and negative aspects but we must try to maximize the former and minimize the latter.
There should be a program that helps people pay their down payment on a home. Many Americans unfortunately cannot get into a home they can afford monthly simply because they cannot afford the down payment.
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. This is the best way for the housing market to grow again, which in the end will give people the opportunity to enjoy the piece of mind that comes from knowing they own a home they can afford and can really call their own.
...e house). In addition, minimum down payments should be set up for home mortgages of at least 10% for example and banks should ensure that borrowers have a flow of income.
Then, besides the mandatory modification the homeowners with a loan problem should also be given government tax incentives, credits and other incentives to stay in the home for an extended length of time. There is no short term fix for all of this of course, but I have made the proper suggestions to do away with all the brown front lawns void of
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens.
Our nation today has become spoiled with instant gratification. Loans and the borrowing system have given the idea that patience is no longer a virtue and that saving is no longer necessary. Material wealth is increased, but so is the idea of false wealth. People have become so bloated with it; therefore they take on more than they can afford. That is what has happened with our nation’s recent wave of foreclosures. Loans have led everyone to believe that they can own a home and it has omitted the practice of saving. That is where the beginning of the solution lies. Our nation’s people need to relearn the value of patience, therefore we need to learn how to start saving again because although loans may pave a way toward homeownership, it is not valued as much compared to someone who has saved for a home.
Unemployment, it is all too common of a label in this day and age for the American society. In Joshua Cooper Ramo’s article, “Unemployment Nation,” he clearly states: “the government can’t hire everyone” and that there is a decrease in jobs nationally. Ramo’s article was published in the Spetember 21, 2009 TIME magazine and includes many personal tragedies that happened to real Americans who have lost their jobs and are unsuccessful in finding another employer. Many hardships are about to sweep over the United States with an increase in percentage of Americans who are jobless, but with unemployment on the rise, where or how can America create more stable jobs?
I wonder if as a family opens the door to their new home, a place where they have holiday dinners, celebrate birthday parties or just are able to say “Home”, understands the importance of their investment. One of the most important investments in a person’s life is purchasing a home. Whether it’s a first-time home buyer or a veteran, buying a home is a complex process. Figuring out how much you can afford, learning your rights, shopping for loans, these are a few steps in the home buying process that when learned correctly, can produce a successful homeowner. Learning how to take care of something as special as a home takes time and effort from all those who are present in the home. As the country deals with the economy and the war, the last thing America needs is more homeless people and the rise of the crime rate. Two ideas I have come up with to help solve the foreclosure crisis is to add a investment course to the high school curriculum across America and insurance companies creating an insurance package that consolidates home and auto insurance at an income base rate.
Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home out of a person’s capabilities to pay for it. If we understand their situation, we will be better enabled to help and solve their crisis.
Mortgage loans are a substantial form of revenue for the financial industry. Mortgage loans generate billions of dollars in the financial industry. It is no secret that companies have the ability to make a lot of money by offering a variety of mortgage loan products. The problem was not mortgage loans but that mortgage companies were using unethical behavior to get consumer mortgage loans approved. Unfortunately, the Countrywide Financial case was not an isolated case. Many top name mortgage companies have been guilty of unethical behavior. Just as the American housing market was starting to recover from its worst battering since the Great Depression, a new scandal, an epidemic of flawed or fraudulent mortgage documents, threatens to send not just the housing market but the entire economy back into a tailspin (Nation, 2010).
...be allowed to place unqualified homeowners in housing that they cannot afford from day one. Standards for mortgage lending are imperative to sustain the housing market. Income versus debt ratios must be enforced along with down payment requirements. And lenders who violate mortgage loan requirements should face stiff penalties and/or jail time. The American economy is driven by supply and demand but it must operate in an ethical environment in order for real prosperity to occur.