Thus stated, we are now in a crisis, and must make some changes in our mortgage loan policies in order to help the people who cannot pay their monthly mortgages as well as the banks, who are forced to foreclose and sell the houses at a loss. There are three variables that affect a monthly mortgage payment: interest rate, principle, and term. The banks simply cannot lower the principle, because they would lose too much money for loans to be beneficial to their business. Lowering the interest rate, even to zero percent, would not significantly lower the monthly payment, and would also leave the bank making no money on the loan. Thus, the only viable option would be to lengthen the term. As of right now, there are fifteen-year, twenty-year, and thirty-year mortgage plans. I propose a new forty-year mortgage plan be created to increase the term of the loan and thus significant...
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...n support. Income is just as important as good credit when it comes to large loans. Not only do the banks have to tighten their qualifications for loan eligibility, but so do mortgage brokers. Brokers who have patrons that default on their mortgages should have their commissions rescinded by the banks. This would encourage brokers to be honest and forthright with their customers while using all information available to ensure the financial stability of the homebuyer. It may seem unfair that some people are ineligible to receive loans, but it is only realistic. It would be a bad business move for a bank to lend money to a person who cannot pay it back. On the other hand, it would also be a bad business decision for a person to get a loan they cannot pay back. Both banks and homebuyers need to be fully responsible for their borrowing and lending decisions.
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- The foreclosure crisis is a very sensitive issue that needs to be acknowledged urgently. This particular issue has put a lot of people in danger by losing their homes. When being in a predicament like losing one’s home it is all about responsibilities. Once a person has been notified that their home is in the process of foreclosure and they only have but so little time to pay their mortgage, this is when compromising comes into action. It is imperative that needs come before wants when in a position of foreclosure.... [tags: Foreclosures, ]
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