My proposed solution for the foreclosure problem has several parts. They include eliminating and legally banning interest only loans, mandatory loan modifications, government tax incentives to stay in a potentially foreclosed home and consumer education.
Many years ago the mortgage companies created the thirty year home loan. It seems like this extended payment plan would benefit the homeowner by allowing more time to pay for the mortgage. The payments were smaller and more affordable than those of a shorter loan. But, the long term time frame was most favorable for the corporations. The thirty year loan plan originated due to the banks theory that many buyers could possibly have financial difficulty in the period of thirty years. The lender would also benefit from the interest calculated in this long span payment plan. In thirty years the buyer pays many times the purchase price in order to own the property. And if during that length of time the home is repossessed, the company makes lots of money all over again on the same home or property. This is especially true if the home market values remain stable.
An even more amazing loan plan than the thirty year is the more recent interest only loan. After two years of straight interest payments, and pure profit for the financing company, the loan payment begins to escalate. So, the consumers dream home must be sold or refinanced in order to avoid the cost of the outrageous increasing payment to the greedy lenders. These loans helped the mortgage companies do well, but the dream home will cost more than ever dreamed if the loan is kept. For the stressed out homeowner this payment is often unaffordable and although the corporation may do well the consumer is left in d...
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.... This mindset needs to be changed in our society because it is a stressful and deceptive way of life. Without much knowledge the public is preyed upon by those getting rich on the interest paid, along with late fees and other fines.
Then, besides the mandatory modification the homeowners with a loan problem should also be given government tax incentives, credits and other incentives to stay in the home for an extended length of time. There is no short term fix for all of this of course, but I have made the proper suggestions to do away with all the brown front lawns void of
Christmas decorations this year. One of them belonged to my now displaced family and
the hardship is one reason I am seeking money for my education. If I win the
scholarship money and become a homeowner one day I plan to be especially wary of any loan that could lead to foreclosure!
“The Good, the Bad and the Ugly of Student Loans” references many great points that recent college graduates or futures college graduates should follow. These include paying student loans fully and on time, as well as consideration of refinancing. The article’s main purpose is to help college graduates prepare to pay off their student loans carefully and correctly. It chooses to focus on the good points of paying off student loans, giving hope to those who may be worried about paying them off.
"Home Owners Loan Corporation." Next New Deal. Roosevelt Institute, 2014. Web. 16 Mar. 2014. .
There was a new concept of credit nicknamed "buy now, pay later." Not long after this concept came to be, the stock market crashed. For the decades before the current housing crisis, buying homes and loaning money was a simple, but strict, affair and had two outcomes. Either the borrower could pay back the money owed, or they could not pay the money back. If the borrower could pay the money back, they could keep their house or whatever they took out the loan for.
Recent studies show that the number of individuals who default on their student loans has been steadily increasing as well. Statistics from the Institute for Higher Education Policy (IHEP) show that between 2004 and 2009 only 37% of federal student loan borrowers were able to make uninterrupted payments; it is an annual average of 7.4% (Cunningham, and Kienzl). According to IHEP, for every one borrower who defaulted, two ...
Subprime loans started out as a generous, philanthropic idea. Giving people who had bad credit the opportunity to own a home regardless of their income or past credit issues showed compassion and caring for the poor, middle class and elderly who couldn’t possibly qualify for a home loan under the previous strict lending standards. However, predatory lenders used this vulnerable groups desire to live the American dream, to own a home, against them. Billions of dollars were made by loan companies and similar financial institutions by writing relaxed standards loans for borrowers as fast as they could. (Jennings, 2012) To make matters worse, lenders knowingly wrote loans to speculators who had no intention of ever living in the home; or at least no longer than it would take to flip the property. In a marketplace with quickly rising property values, the adverse impact of this activity was completely shadowed, and yet lurking in the background is the one market constant, what goes up must come down.
To get our dream job, to get a good job we must go to school and get a degree. Confucius once said “choose a major you love and you'll never work a day in your life.” We must leave home and deal with paying our ways, even if that means dealing with loans. Our families will go into as much debt as possible, the government tries to help for all of the students in the US who are trying to go to school and sometimes it is just not enough to cover it all so the banks must help. Loans are stressful, and hurtful, as students we must try and win as many scholarships as possible to lighten the load on our families and the stress that would come personally from trying to pay back loans out of college. Life is different now, we are growing young adults facing a new reality and dealing with new battle each turn of the corner but it is possible to get through dealing with student loans and finances once we get to do what we
Most people today accept the debt that comes from college. Students consider student loan debt as a “good debt.” They see other students make this mistake but follow their path anyway. Nearly 80% of college-bound students have not projected the total amount of money they will need to graduate college.
Student loan debt makes up a large portion of the debt in this country today. Many defaulted loans are the demise of high interest rates, poor resources to students in educating them on other avenues and corruption in the governmental departments that oversee education and financing. There are many contributing factors that lead to the inability to pay off student loans which need government reform to protect the borrower’s best interests.
The best way to solve this foreclosure crisis is preventing homes from foreclosing one house at a time. The American family needs a simple option to save their home. My solution is based upon the concept of the homeowner paying what they are capable today, with a long term solution for the homeowner to repay the entire debt eventually. If the homeowner can now afford to make the payments, then they can escape foreclosure, rebuild their pride, and be productive citizens.
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
Also, mortgage lenders during this time were not concerned about making loans to borrowers since they observed that housing prices would continue to increase and borrowers would be able to refinance in a few years time and thus the mortgage company would never lose any money (Sebastian, 2008). If the borrower was unable to pay his mortgage; the lenders could always sell the home and off-set the cost of the sale with the original loan amount. This was the common consensus among financial companies, mortgage lenders, and investors. However, like everything else in life, nothing remains the same as our nimble anticipations. Consequently, housing prices started to decline and lenders found themselves in difficulty. Financial companies should
The foreclosure crisis has no simple solution since so many things affect it, but fixing each thing one by one will gradually help. Incentives for people to buy are fantastic ideas. The $8,000 tax credit to first time homeowners is a good start. There could be others that don’t exclude current homeowners. The first few months’ mortgage could be paid for, or provide furnished houses. President Obama is very intellectual and I think he has the capacity to make wise decisions and fix our foreclosure crisis.
This could give me an opportunity to get a secure job that pays a higher wage which is good as I would be able to use this to get though life and pay my expenses such as a mortgage. This would also help me to build a secure family and not have to worry about financial income. This would also allow me to make my credit card payments on time and not having to worry about my credit score being
Following the sudden increase of the dot-com bubble and the possibility of decline threatening the US management started dropping the interest rates to improve the economy. The interest-rate turned as low as 1.5% in June 2003 which was at its least possible point since 1958 (Gerding, 2009). This low interest-rate found its users in the shape of homebuyers and borrowers with the housing market at last expressing some development after period of declining movement. Indeed the rate of a thirty year unchanging mortgage in the year 2003 was the lowest in 40 years and thus the dream of owning a residence in US was becoming an incredibly simple reality for Americans (Ely, 2009). With increasing housing charges borrowers assumed th...
...ell I plan to receive an academic scholarship, get students loans, and borrow money from a relative. I can aquire an academic scholarship by getting into the top five percent of William B. Travis Highschool of class 2007. I can get student loans by applying to the College Funding Services. I will get my money fast and make no payments until after graduation. Plus I have a grandpa that says he can pay for some of my college money.