The On The Foreclosure Crisis

The foreclosure crisis that took over the United States a few years ago left many people facing economic hardships. This crisis happened because there was a huge housing bubble that was unsupported by actual home values. The bubble began bursting in spring of 2008 and the crisis culminated in mid-2009. Many lenders went out of business and many home owners began losing their homes. When the government became aware of this problem and began to implement new programs, it was already too late for many homeowners. Those homeowners are not at a point where they might be considering buying a new home. The housing crisis has created new rules, regulations governing the mortgage industry, and has also created a new agency dedicated to consumer protection. This consumer protection agency is called the Consumer Finance Protection Bureau. These dramatic changes have helped to create more responsible lending. The improving market conditions such as low housing costs and competitive interest rates are allowing those affected by a foreclosure to become homeowners again. Prospective buyers have a multitude of programs available to them, so even those with less than clean slate have several options.

The insolvency seen in the Housing Market manifested in the large number of stagnant foreclosures caused a dramatic decline in housing prices, which resulted in many homeowners owing more money on their houses than they are worth. Market-level insolvency is caused by capital flight in a specific market in response to a scare during a decrease in solvency. During the scope of this recession, the initial, progressive decrease in solvency was caused by a negative Net Capital Outflow in conjunction with the cash-vacuum produced by the US Budget Deficit, and the scare was caused primarily by the failure of several significantly-sized corporations and a rapid increase in foreclosures caused by the loss of a large number of jobs.

I often used to watch a show called “Extreme Makeover” where a team of builders would come to a neighborhood, build a need worthy family a beautiful new home, and then just give it to them. “Wow! What a lucky family,” I would say. “How fortunate.” However, as time went by, that same family would be in the news again. Why? The house was in foreclosure. The people had gone to the bank and taken out a mortgage against the home, then spent all the money they got for it on other things.

When the housing bubble burst in 2007, 7.3 million borrowers lost their homes due to foreclosure or short sale. These “boomerang buyers” are slowly but surely recovering from financial setbacks and reentering the housing market. Conventional lenders have seasoning requirements that prevent buyers from obtaining a new mortgage until they have repaired their credit: a seven-year window for foreclosures and four years for short sales.

According to Desmond, Arleen is not alone in her dilemma. A great many Americans are being evicted in light of the fact that they cannot pay the rent (Desmond, 2016,p 4). Like Arleen, many poor families are spending the majority of their income on rent and utilities. In fact, using estimates from The American Housing Survey (AHS), 1991-2013, Desmond finds that, in America, most poor renting families use over half of their income on housing; and, roughly one quarter spend more than 70% of their income to pay rent and utilities (Desmond, 2016, p 4). Aside from the fact that Arleen’s monthly welfare stipend of $628 has remained stagnate for years, housing costs have soared. Due in part to the foreclosure crisis, and the deluge of millennials into the rental market, the demand for rental stock has risen.(Sisson, 2016). At the same time, escalating building and labor expenses, and declining subsidies, have helped to slow new construction. Thus, demand for rental housing is exceeding supply, resulting in escalating rent prices. Furthermore, the razing of older public housing projects and defunding of government assisted housing has pushed poor families into the private rental market (Sisson, Patrick may 19, 2016). As a result, most poor families in America today live unassisted in the private housing market. In fact, in 2013, 67 percent of poor renter households did not receive federal housing assistance (Desmond, Matthew, 2015). One day, Arleen stopped by the Housing Authority

Following the 2006-2008 housing market crash, 4.8 million of homeowners lost their most valuable assessment to foreclosure, and another 2.8 milliongave up their homes in short sales. These former homeowners that are reentering the housing market after losing their homes during the housing market financial crisis are now part of a wave of “boomerang buyers.” According to Real Estate experts, boomerang buyers who are returning to the market were at least 10 percent of all United States home purchases during 2014. More important, this trend is expected to increase in 2015 and 2016 as more boomerang buyers become eligible for new options to get their dream homes again. The unquestionable fact is that a great majority of boomerang buyers are hardworking, honest people that got caught in the middle of one of the biggest housing crisis that occurred in the last 100 years. Fortunately, those housing crisis’ victims are beginning to see the light at the end of the tunnel since several options are becoming available to them in order to get back into home ownership. Among these options, I like to explore some available avenues for those boomerang borrowers to include the rent to own option, Veterans Affairs backed loans, and owners financing option.

There are many reasons a person can end up in foreclosure. Many people were victims of predatory lenders, whom they trusted to have their best interests at heart. These lenders misled homebuyers and helped them achieve loans for purchases that were beyond their budget.

“Shit happens” is probably what most of these foreclosed homeowners hear after they were forced to leave their comfy home. Even though the economy is unpredictable, not a lot of the victims are satiable by such a vague expression that has caused them to lose their property. It’s a harsh comment, but the economy has turned into something that we have little influence over. One of the worst feelings is having minimal control over the consequences and outcome. Some people are afraid to make the same home-buying decision again as a result, because what’s stopping the economy from taking another shit on them again? The answer is probably nothing, but what are some actions these homeowners can take to ease into settling down in a home again? Foreclosure victims can try to improve their credit score and it could get them that approved private loan in return if needed. Saving money is also a general option for those that tend to spend a lot on luxury retail goods. Another option can be utilizing the rent-to-own option to have that ‘homey’ feeling as soon as possible. Some people can also test their patience and attempt to wait it out until the economy exits the lavatory.

The desire to own a home in America is very common. As a matter of fact, there is no American Dream without home ownership. Years ago, an economic crisis swept the nation leaving many homeless, jobless, and flat out broke. Many Americans as well as businesses were victims to this crisis. Fortunately, the market has started to recover and regain structure and many have been able to get back to into the home buying market. Millions of jobs are being created and small businesses are beginning to see profits as well. Overall, the economy is in much better shape. There are many programs available to help Americans rent, lease and even own homes. “Rent-to-Own” has become a great option for people that want to get back

The 'foreclosure crises ' that swept the nation several years ago claiming countless well-to-do homeowners was indeed an undesireable circumstance, which would be the case for any situation similar. Many people not only lost their homes but unfortunantly credit as well. Having a feeling as if one may need to just begin all over again. As options, some may have stayed with family members or friend(s), some may have went into a homeless shelter, some may have found a residence/suite and paid weekly/daily or some may have taken whatever they had left in savings and rented out a place (rather it be via lease or month to month). Options depending on financial income, rather it be the homeowner lost their job and began to live on savings

Many families lost their homes to foreclosure during the recent economic downturn in the US economy. These former homeowners became renters as the national home ownership rate dropped. Many families felt that home ownership would remain out of their reach due to previous foreclosure history. In addition, losing your home and transitioning to renting is tough on your psyche. However, as rental rates continue to increase and the economy recovers these same families now see possibilities of home ownership again. The housing market has characterized the buyers as “Boomerang Buyers”.Approximately 5 million people lost their homes to foreclosure or short sale and become potential boomerang buyers. Quietly, by buying homes again, these buyers

The “rent-to-own” option for home buyers who experienced a home foreclosure and/or who have poor credit, is a great benefit in order to re-enter home ownership. In 2008, the home foreclosure crisis swept across the U.S. With lax credit standards, loss of jobs, and predatory loan practices many homeowners lost homes. Now, in 2014, the economy is in recovery and many great deals exist for buying a home but some potential buyer are locked out because of poor credit and lack of savings. The “rent-to-own” option can help overcome these credit and savings issues. However, there are advantages and disadvantages for these buyers. Let me explain.

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

The financial highlights of the morning, day, and evening news for the past year have contained heartbreaking stories of home foreclosures, including families losing the homes of their dreams, elderly couples losing the only home they’ve ever owned, and immigrant families that have overcome unimaginable adversaries to own a home in America, a symbol of their accomplishment, tremendous journey, and countless sacrifices, only to lose their home to foreclosure. Home foreclosures have become so frequent that the Mortgage Bankers Association estimated that one child in every classroom in America is at risk of losing their home and that one out of every 200 homes will be foreclosed upon (Neighbor Works

Today’s “boomerang buyers” are a product of the housing market crash that began in 2006 and left millions of homeowners in negative equity situations. Home values nationwide plummeted 25-30% by January 2009 and an estimated 5.3 million people found themselves in a foreclosure or short sale situation between 2007 and 2013. Although current home prices remain 17% below peak 2006 levels, the real estate market is showing signs of recovery as evidenced in the upward trend of prices over the last three years [CoreLogic, 2014]. According to John Burns Real Estate Consulting, boomerang buyers who lost a home to short sale or foreclosure were projected to make up about 10% of all real estate sales in 2014. Returning boomerang buyers may now be faced with difficulty acquiring a loan due to their previous real estate history, damaged credit, or limited capital due to recent financial burdens. Despite the obstacles, there are feasible financing options that will help potential buyers achieve their goal of homeownership.