There is no shortage of programs now available in the mortgage industry to help ease the foreclosure crisis. Although some of them provide direct financial assistance to key participants in the foreclosure process to encourage them to find a less costly alternative, there is really no national effort to address one of the most stubborn factors that often leads to foreclosure and in some cases thwarts efforts to avoid it.
Many borrowers in the U.S. owe more than their house is worth, either on just their first mortgage or in combination with a second mortgage or home-equity line of credit. A First American CoreLogic study recently estimated that 23 percent of all homeowners are in a “negative equity” position, and the number is
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These charges are now either included in the closing costs or added as premiums on the interest rate. HARP is only available for performing Fannie and Freddie loans, but that covers a huge portion of the U.S. mortgage market.
In a recent article in his nationally syndicated newspaper column on real estate, Ken Harney reported on a new study by Brent White, a professor at the University of Arizona, which argues that many underwater borrowers should intentionally default on their loan and bear the consequences of being shut out of the credit market for a few years. That strategy may be particularly appealing in states where lenders can’t try to recover unpaid mortgages from the borrower’s other assets.
Such “voluntary foreclosures” are one form of a problem that has shaped the foreclosure debate since the government first began devising alternative strategies. Lawmakers and officials in both the Bush and Obama administrations have struggled to find ways to prevent homeowners from using federal assistance when they don’t need it, or profiting from their “bailout.” That goal has become even more intense since the government was forced to create the $750 billion Troubled Asset Relief Program, most of which has been used to prop up banks and other “too-big-to-fail” enterprises. A relatively small portion of TARP is being used to pay for HAMP incentives to borrowers, lenders and investors.
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Seeing other people reactions towards foreclosure helps me to develop a meaningful value of life and how to appreciate it everyday of my life. As I see what is going on around me I came up with three plans that can be executed to help all people who are dealing with foreclosure issues. This can become a major factor for the economy. One is called Own A Home , Financially Fit, and Bills To Kill. These are guaranteed plans that will help any individual that feels that they are not financially secured to become a homeowner. The Own A Home program is designed for aspiring homeowner in which they
Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.
The current financial crisis, which had its roots from subprime mortgage crisis, began to increase dramatically in September of 2008. There have been significant economic disorders in United States alone. Major banks and financial organizations around the world are going bankrupt and writing down billion dollars. Housing markets are falling not just in United States but all around the world. This crisis is truly global and it is spreading like fire. Because of these economic crises, the US Congress came up with a $700 billion bailout plan to buy troubled assets from financial institutions who are struggling financially. Nevertheless, another bailout was proposed and it's the homeowner bailout. It is known that the foreclosure
Foreclosure is a dangerous issue that has swept our nation in the last few years. Americans are losing their homes due to jobs being lost, home values falling, and banks lending out more money than homeowners can afford. Despite the multitude of issues that arise out of foreclosure, the main problem at hand can be almost solely traced to the economy. The recession has put many people out of work, made taking out loans more difficult, and has caused a nationwide panic. Therefore, to completely solve the foreclosure problem, it is necessary to trace the issue back to its roots, being the economy. This would take fifty pages to discuss, so this paper seeks to solve one aspect of foreclosure. Refinancing is an option that has become
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
Since the Great Depression, our economy has not seen such devastating downturns. As a result, many of us have lost our jobs and subsequently, our homes. The current foreclosure crisis is affecting 1 out of every 5 Americans, Jonathan Lain (How to Solve the Foreclosure Crisis). So now the focus is on finding ways to solve the growing epidemic of foreclosures. I propose that the government fund a non-profit organization, whose mission is to reduce the number of foreclosures among the American people. Furthermore, although the initial funding would come from the government, as a non-profit, the agency would be able to obtain grants and hold fundraising events in
Foreclosure has become an outbreak affecting the entire United States of America. Realtytrac just reported in the month of April 2011 that one in every 593 housing units received a foreclosure filing. (N1) That statistic is for just one month! Some states such as Arizona, California, Florida, Michigan and Nevada continue to be plagued with an influx of homes falling victim to foreclosure or some other form of default. Each home that is a casualty to a foreclosure, short sale or even bankruptcy was collateral for the lender holding the promissory note. The consequences tend to come at a cost for the lender selling the property but a deal for the buying investor. The costs incurred and the losses experienced by the
The foreclosure crisis in America has impacted everyone- even those who don’t own homes. Our nation is currently struggling with high unemployment, a relatively illiquid credit market, and a deficit that raises serious concerns about the value of the US Dollar in the not too distant future. With interest rates already at historic lows and the government pursuing an unprecedented policy of quantitative monetary easing, options for government intervention are limited. While there is no simple solution to this problem, I think that we must look at the reasons the housing market went into crisis, and based on that develop a regulatory system that will allow us to avoid another situation like this in the future. If Americans believe
The United States’ foreclosure and housing market problems have been well-documented in recent years. This issue has only been heightened by the 2009 economic downturn. Can the sky-rocketing foreclosure market truly be blamed on the recession, however? Can the issue be pinned down on the masses of people who have lost their occupations? Surely many of the cases can be traced back to these harsh conditions, but many more, most likely, can be attributed to something else. Foreclosures are not a new phenomenon and have been a part of American society for years. So, in order to determine a plan for how best to reduce the number of American families losing their homes, it seems best to look backwards rather than simply at the present.
Banks now offer programs to help homeowners/homebuyers, but many times, these loans are often hard to obtain. The current programs have more stringent requirements that are unreasonable for distressed homeowners. In my opinion, the only way to rectify the foreclosure issue is to make a substantial change in how potential homebuyers and homeowners obtain loans.
Foreclosure, the process of claiming the defaulted property to cover the cost of an unpaid debt, has hit America like a tidal wave. Considered to be a crisis and a major factor in the poor economic situation of today, there is no doubt that the current state of the housing market and the influx in foreclosures across the nation has had a dire impact on the American economy since the beginning of 2007. Strategies, policies, action plans, and all other means of organizing a recovery have been attempted, but to no avail. Not even Congressional legislation was able to revive the stalwart economy (although the legislation was not specifically targeted toward foreclosure practices or policies). The plain and simple truth is that no matter
The foreclosure crisis was one of the harbingers of the coming economic recession. This was the issue that shifted the focus of the 2008 presidential election from the Iraq War to the economy. As one can imagine, many individuals and families are currently hurting as a result of this foreclosure crisis. High unemployment rates and lack of job creation leave very few options for already struggling homeowners. Because the housing industry composes such a large part of the American economy and affects so many Americans, it is necessary for the federal government to be directly involved in a solution to the foreclosure problem. Like the New Deal programs during the worst economic situation in history, the government must again be
One way to solve the foreclosure crisis is to actually foreclose on every homeowner’s home loan, including the homeowners in bankruptcy, pre-foreclosure and post-foreclosure. The credit report of these homeowners should read as a recession in 2009 and it should not lower their credit scores. The banks should then match the previous interest rates to the interest rates of today and appraise each home and property at the value that it was assigned by its local tax assessor.
The United States economy has been in trouble for the past couple of years. The foreclosure crisis is a condition that began due to the inability of homeowners to pay their mortgages. Foreclosure is a legal proceeding whereby a lender obtains a legal termination of a debtor’s right to redemption. The foreclosure rates have been increasing for a considerable period and certain steps have been put into place to solve the problem. While the government, financial institutions and the general public are highly aware of the crisis, the steps taken to combat the problem are still not sufficient as the foreclosure rates are still increasing.
Around 2006 the price of houses began to fall substantially fast. “The oversupply of houses and lack of buyers pushed the house prices down until they really plunged in the late 2006 and early 2007” (The Subprime Mortgage Crisis Explained). These actions threw investors into a big dilemma. In the beginning they believed buying the mortgages would bring them a profit, but quickly realized that the mortgages would cost them more financial damage than reselling the homes. “Nationwide, home vales have declined about 16% since the summer of 2006 and experts project that the drop will continue until homes have lost about 25% of their value” (Biroonak, 2008). In other words mortgage homes are “underwater”, that is, the mortgage owed equals or exceeds the value of the house (Biroonak, 2008). Investors and homeowners started to go more in debt trying to pay off their original debts.