Solving The Foreclosure Crisis That Devastated The Nation Years Ago

Some people might think that renting and owning are pretty similar, but they do have a lot of differences that people tend not to think about. In fact most people don’t do a lot of research on the differences and similarities. Renting a place to live is a wiser choice and is cheaper in the long run, but having a place that you own has a lot of advantages to. Some differences that people don’t think about are maintenance, utilities, and restrictions.

- he can sell to his friends his expertice and knowledge of the market and "demand"

Prior to the 2008 economic depression, obtaining a mortgage was relatively simple for home buyers. However, many of those mortgages had provisions that made it difficult for borrowers to repay their mortgages (“Dodd-Frank,” n.d.). As a result, many homeowners lost their homes when they were unable to repay their mortgages, which led to the real estate crisis. In 2010 the Mortgage Reform and Anti-Predatory Lending Act, also known as the Dodd-Frank Act, was enacted to reform how mortgage servicers vetted borrowers and to eliminate the use of predatory loan practices (Cheeseman, 2013, p. 485). Under the Dodd-Frank Act, creditors must establish borrower’s credit history, income and expected income, debt-to-income ratio, and other factors before

Renting to own is a viable option for many financially-stricken Americans by eliminating the high costs of down-payments. Renting to own allows the seller to lock in a sale price while renting to another party, usually a small amount higher than a mortgage, but it allows the buyer to rent the house under contract until ready to purchase. The process keeps the seller from paying multiple mortgages without income, and it benefits the buyer by giving a viable alternative for home ownership instead of traditional

The owners who do offer the “rent-to-own” option are not only allowing the tenants time to come to a more stable financial state, but are making money themselves. If the

The primary difficulty facing “Boomerang Buyers” is the bad credit that is haunting them. The best way to get out from under that cloud that follows them is to demonstrate good financial sense. A rental option is a good tool for this. You can negotiate rates and lengths of contracts to fit with what the “Boomerang Buyer” can comfortably agree to. The downside of this traditional arrangement is that at the end of the rental period there is nothing other than improved credit ratings to show for the money expended. A rent-to-own option on the other hand sits in the middle between a pure rental and a pure mortgage. You can negotiate your rental rates and contract terms like with a rental property but a portion of the monthly payments is turning into a potential asset if financial circumstances still hold positive over the period of the contract. The other benefit to the “Boomerang Buyer” is that as long as they have not over contracted themselves for rent they can walk away from the investment without suffering legal action and credit consequences.

Some prefer renting to buying because they believe that the renting might seem to cost less than buying a house. The tenants can possess a stable shelter without a high-cost per month, which provide the benefit to the renters within 10 years (Andriotis, 2014, p.4). Renting a

The rent to own option requires prospective buyers to pay a monthly rent to the homeowner with a portion of the rent going towards purchase of the home at a later date. Usually this will last 2-5 years before the standard home purchase contract goers into effect. This option is good for the sellers who have not been able to move their house quickly. It allows the sellers to move to a new location while having a cash flow to pay the mortgage. It also gives you time to see if the homebuyers can afford the house and will be good for the money. The boomerang buyer will have a checkered credit history due to their foreclosure so this gives the seller time to see if they can maintain payments. If payments can be maintained then credit for the buyer will increase and the sellers have a flow of money so it is a win, win situation.

When the real estate value began to drop in 2007, hundreds of thousands of Americans were evicted from their homes through foreclosure or short sales; giving way to one of the deepest economic collapses in more than half a century. Now a large amount of borrowers are starting to bounce back. Like a boomerang, these battered borrowers are re-entering the home market after years of renting, nursing their credit and saving enough to buy again; but in a economy like this that we could say now is sort of “stable” is it smart going all in on another mortgage or better going with the “rent-to-own”.

Before my dad began working at RNR Tire Express I did not know very much about rent-to-own. I understood that it meant you rent something until you own it just by drawing conclusions. I think it is easy to find the benefit of rent-to-own in America especially in tough economic times. Nowadays it is uncommon for people to be able to pay for large, yet necessary items in one full payment. For example, new tires can be very expensive, but they are necessary in order to drive safely. Old, worn tires are a safety issue and could cause more damage to your car if they aren’t replaced. I think many Americans dread having to get new tires because it often times means spending money that they do not have. I think there are many Americans that would have to choose between new tires or paying another bill if they had to pay for their tires in full, upfront. Rent-to-own makes it possible for someone to buy a new set of needed tires without breaking the bank by allowing them to make payments. Another benefit to making payments is that usually the buyer can choose the best time for them to make their payments such as weekly, biweekly, or monthly.

Brooklyn, NY – December 30, 2009 Foreclosures continue to rise drastically across the United States due to the recession, and have effected, and continue to affect thousands of families and individuals every day. One aspect we must take into consideration is that most people are not informed of what foreclosure means, or the process, even those who are homeowners. I believe that one step to preventing foreclosure is to educate first-time homebuyers. In addition, first-time homebuyer programs should not only assist potential buyers with financially preparing them to buy a home, but to keep the home once

Renting is typically less expensive overall than owning a home. First, it does not require a substantial down payment, though it often requires a security deposit equal to 1-3 month's rent. Also, renters are not responsible for property taxes and repairs on the home, as homeowners are. Monthly rent is often cheaper than monthly mortgage payment, depending on the home and the property being rented.

Looking back at the history, the ‘rent-to-own concept has always been one of the most passionate subject in the domain of renting to owning a property. Considering the difficulties that can be associated to the concept‘rent-to-own’, such as not being able fulfill your part of the contract and maybe ended up losing all the money you have invested in a house that would never be yours, I think it is very important to make a serious plan before thinking about jumping into anything of that kind that could become a terrible problem. So, my solution is simple: make a plan in relation to the job your have, to the condition/situation of the actual economy of the country, and also base on the agreement you make with a home owner.

With a "rent with option to buy" situation, the gap in time between setting up the contract and actually buying the house, it appears based on research that lenders fear that their buyer will be locked into a condition that may not suit them in the future. Interest rates may be low today but locking into the current rate could keep them from benefiting from an even lower rate in the future, or they could lose the money they set aside if they do not follow through on their contract to buy. One would think that the buyer could lock into a current market purchase price with this option but to the contrary, it seems that the owner wins on this detail as well, because the two parties guestimate as to the potential price the house would have 2-3 years from the forming of the contract, so I don’t see the purpose of this option as far as making it a win situation for the buyer.

The rent-to-own option also gives people the opportunity to try out the home and make sure they really like it before making a long-term investment. Also, they have a chance to learn the neighborhood before taking the plunge. I have never purchased a home, but I would bet that many current homeowners wish that they had the opportunity to do a “trial run” before diving head first into their home purchase.