It is a well know fact that the world is in a financial crisis which has resulted in the foreclosure crisis. This is a problem that can not be resolved by the government alone. If the government continues to hand out bail out money to businesses trying to help them avoid bankruptcy or from going out of business the national debt will continue to increase. The national debt will have to someday be paid off and if the government continues to borrow money the result will be higher income taxes paid by those that are already struggling to bring home a paycheck that will meet their basic living expenses. In turn this will make the financial crisis continue to get worse as time goes on. This is a problem that has to be solved by each business …show more content…
The solution is mortgage amendments. These amendments are not the same as a refinance and do not require any refinance fees or appraisal. They should take very little time and expense to create, approve and be considered a legal amendment filed with the original documents. These are meant to be temporary but the time limit on them is dependent on the borrower’s income allowing them time to find a job or increase their current income.
There will be two types of amendments. The first one will lower the interest rate significantly which will lower the monthly payment without changing the term of the mortgage. This one can be very beneficial to those who have taken a pay cut or a slightly lower paying job and will not extend the term of the loan.
The second one will also lower the interest rate significantly but will also lower the principle payment and extend the term of the loan until the loan is paid in full. The disadvantage to this amendment is that the borrower may end up paying more in interest through the length of the loan. The advantage is that the borrower will be able to lower their payment to an amount they can afford.
With both amendments the borrower will report their income yearly until their income reaches the amount that was provided in the original mortgage documents or their income from the borrower’s previous job. Reasonable income guidelines
Dramatically decrease monthly mortgage payment and provide homeowners extra income to live each month. For example, a $575,000 mortgage at 6% interest rate is about $3,500 per month. The same loan at a 2% interest rate is approximately $2,100 per month.
The foreclosure crisis, which tragically happened several years ago, stole away the homes from countless Americans and left them high and dry. These Americans were not even neglecting to pay for their mortgage on purpose; the economy took a drastic downfall and took all of those unshielded Americans with it. Now, these Americans are left with many questions that are unanswered – until now. They still have the chance to improve their credit, test out their dream home, and thrive in the current reasonable home prices and interest rates. All the potential buyer has to do is know where to find that information and how to use it. Now, it is time to explore those tempting options.
The bottom line is if lenders would lower some of these interest rates and are willing to work with the borrowers, I am certain they will make money. If they would add these clauses I suggested it will cause both parties to become more aware of the financial
The recession that started in December 2007 and has lasted through 2009 has been the worst economic downturn of my lifetime, and after listening to my parents and grandparents I realize this could be one of the worst recessions in generations. We can all acknowledge that this period of time since 2007 has been the most difficult period in generations for so many middle class Americans who thought they were secure or within reach of the American dream to own their own homes. I have heard people on TV and on the national stage debate the reasons and the impact of the foreclosure crisis on the economy. This debate has been frustrating because people focus too much on arguing who is right or who was wrong; some people claim the foreclosure
Many American families are being forced into a foreclosure on their houses. Families are unable to pay their bills that are due to their mortgage lenders, so the lending institution decides to initiate a foreclosure on the property. When a foreclosure reaches completion, the family loses its right to the property and the lending institution assumes ownership of the house. The family or current resident is evicted as a result of not being able to make payments in the amounts that were agreed upon at the signing of the mortgage loan. As frightening as losing a house is, and considering the impact a foreclosure will have on a family’s financial future, I believe there are ways that a foreclosure epidemic can and could have been avoided.
Another solution the foreclosure crisis would be sending out more stimulus packages. Stimulus packages serve the purpose of stimulating the economy by giving random amounts of money to the nation’s people so they will have extra money in their pockets to spend on items that will benefit the economy because people will not hesitate to buy and increase the value of the dollar.
* Indicate to the lender, in case the personal financial situation is temporary in nature. This will enable the lender to offer from a choice of various mortgage reduction programs that will enable the lender to repay back in good time.
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
Three out of four home owners say that their home is their biggest source of wealth. This statistic comes from the National Association of Realtors. When buying, you aren’t just buying a place to live, but also an investment in your future. It’s very easy for home owners to get in over their means. Suddenly the economy drops bringing the housing market down with it. Before you know it that long term investment has turned into a long term money black hole and you are headed towards foreclosure. Now that the economy is recovering, collective home prices are appearing and interest rates are low. Hopefully buyers can take what they have been through and make wise decisions when looking for a home. They will need to take a few actions, along with a few options they should be aware of before they even think about going all in on another mortgage. Create a savings, reestablish credit, rent-to-own or seller carry back, figure out their budget, and find a good interest rate.
It is no secret the foreclosure crisis has played a significant role in the financial meltdown of the past year. The collapse of the housing marketing has brought thousands of families across the country to financial ruin, forcing many out on the streets. Although the common consensus is that something must be done to stabilize the foreclosure crisis, the agreement ends there. Proposed solutions to the foreclosure crisis have drawn controversy from all political affiliations and walks of life. This controversy is largely due to the fact that no one can determine for certain, a single factor that led to the housing market meltdown. By carefully analyzing the factors that potentially caused the foreclosure crisis, one can better determine
The simple solution is to reduce the home owner’s monthly payment to an amount they can afford, by reducing the size of the loan balance. The framework would be as follows:
A mortgage refinance lead can reduce your monthly payments and hence put more money into your pocket every month. They can lock a very low rate of fixed interest and speed up your debt repayment process. Mortgage refinancing can be a great way to lower monthly mortgage payments. Mortgage refinance lead provides security of a fixed rate with their adjustable rate loan which reduces the rate of interest payable.
2. If yes, bring the owners of the foreclosed house to the table with the bank and reissue a new mortgage on that same house at a rate under 5% utilizing the original balance, no matter if the house is now below the value of the current market or not. Do not charge closing costs, and give the owner to two months of deferred payments with no interest. This may allow the original owner time to recondition an abandoned home. The bank can then reissue a new mortgage with the lower fixed interest rate at the price the house was repossessed at, no matter what the current sales value is. It may give the bank access to equity if the price of the house did not plummet. This idea makes the owner have some skin in the game, as they will have to stay in the house long term to reacquire equity. Have part of the deal be that the bank withdraws from the credit bureau the declaration of bankruptcy so the owner’s credit record is cleared. Everyone understands the impact a poor credit rating has on every future purchase and may be enough to make the deal attractive to the owner. Condition the offer on prompt payments and good care of the reclaimed property. Most owners never wanted to leave their homes. They usually had no
While slow, painful, and frustrating all attempts at solving the foreclosure crisis today have been short sighted. Despite public outcry, little was done to try and prevent a future crisis. Therefore, the focus of this essay will be on provisions to change the system we have today that will mitigate if not stave off the possibility of a future crisis.
Home foreclosures have been a hot topic in recent months as the economy has been in a serious downfall with a very slow recovery process. There are many different philosophies and many people truly feel that we can recover from this. We can alter the foreclosure status by giving serious consideration to the economic times and the types of mortgages that are available. Buyers must become more educated on the additional costs when getting a mortgage such as taxes, insurance, etc. The government has to take steps in regulating these types of entities and not be looked upon as the factor of salvation in saving the banks and mortgage industry.