Solving the Foreclosure Crisis: Renting to Re-Own as an Option for Homeowners and Lenders

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

Within the past three to four years, the United States has seen the dramatic collapse of the housing market. The housing bubble spurred by ill-advised loans to individuals who could not afford a mortgage, complicated contracts which had interest rates and payments changing without reason, and the mass purchasing of bad loans by lending superpowers, had popped. The rapid increase in the value of homes across the country for the previous decade, had been a falsity, in which billions of dollars funded by investments and home purchases were lost within a few months (Wikipedia.org: United States housing bubble). Millions of home owners were found to be unable to pay their mortgages, leading to hundreds of thousands of foreclosures. These

The foreclosure crisis has hit America exceptionally hard these past few years especially in California where the housing market is at its worst. California is also the worst because it is home to a lot of the most expensive properties. People are walking away from their homes because they cannot afford the mortgages or loans that they took out on their homes. The lenders are also to blame for this because they did not thoroughly look at them borrower’s credit and income to ensure that they would be able to pay it back. In some cases they would lend money even if the borrower had terrible credit. This has caused corporations like, Country Wide Home Loans, to be bought by other companies. A rather simple solution to this would be to

One of the major issues in our economy is the issue of foreclosure. With our rapidly dropping economy keeping a home is a difficult task for many home owners. Also with the increasing unemployment rates, many people are losing their jobs, and no house payment can be kept up with only an unemployment check. There are many existing ways to decrease the occurrence of foreclosure but also many ideas that have not been heard.

Foreclosure has become an outbreak affecting an entire nation. 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 is secured as 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 affected

This initiative would relieve immediate market pressure and lower bankruptcy and foreclosure with a viable alternative plan available for homeowners struggling with unmanageable mortgage payments. Even though creditors receive less than originally agreed upon in the mortgage, they will still recoup much of the sum which otherwise would not happen in cases of bankruptcy and foreclosure. The loss through restructured mortgages is mollified by the government’s 40% tax credit as homeowners are able to keep their property and more easily maintain their mortgage payments.

In 2010 more than 1.05 million homes were foreclosed on in the United States, up from 918,000 in 2009. It is estimated that 26 percent of these homes were strategically defaulted on by homeowners that were “upside down” in their home equity. Is the decision to strategically default ethically sound? It has been estimated that in 2009 foreclosures cost communities $502 billion and homes that in close proximity to foreclosed homes lose, on average, $7,200 in home value (Center for Reasonable Lending, 2009).

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.

Foreclosure is a growing national disaster in the United States. Every time you tune in to your local news, there is a new family whose house is being foreclosed. Every time you ride around the neighborhood, there is another house up for sale. There are several solutions to this increasing trend including cutting government spending and cutting funds towards unsuccessful government programs, devising financial plans to assist families by setting up payment plans that they can afford, getting communities more involved, more stimulus packages, raising the taxes of the wealthy to lower rates, and easing the limits on section eight housing.

Foreclosures are painful for everyone, including the individuals, lenders, and the costs associated with foreclosures are taking a toll on our communities. Lenders and investors lose from 20 cents to 60 cents on the dollar, typically losing $50,000 or more on each foreclosure (per Craig Focardi, CMB, Research Director, TowerGroup’s consumer lending division). One foreclosure can result in as much as $220,000 in reduced property values and equity for nearby homes (William C. Apgar and Mark Duda “Collateral Damage: The Municipal Impact of Today’s Mortgage Foreclosure Boom”). In

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

What do we think when we hear the word “foreclosure”? Most people realize that it’s definitely something that is not good, some say that it’s when someone fails to do something, but those people don’t really know the meaning of it. But before I present my idea let’s review the meaning of such process:

The burst of the housing bubble in 2006 left millions of homeowners helpless to inevitable foreclosure. Current lending practices make it difficult for potential borrowers with tarnished credit histories (like foreclosure) to qualify for a loan. Since traditional sources of home financing are unavailable to so many people, alternatives have begun to flourish in the economy to meet the demand of people wishing to purchase homes with less-than-perfect credit histories. The primary options boomerang buyers have at their disposals to obtain home ownership again are: lease-to-own, seller-financing, hard money, and sub-prime. Each of these paths toward home ownership comes with unique sets of benefits and costs. This paper will explore each.

How real is the mortgage foreclosure problem in America? How did it come about? What are some possible solutions? First of all, the problem is so big that almost everyone knows someone who lost their house because of a foreclosure, and this is new. It didn’t used to be that way. Listening to the stories of foreclosure evictions provides an eyewitness viewpoint of how it happened. This is important because it provides a background against which to decide solutions.

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