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.
The first suggestion to solving the problem of foreclosures would be to lower the mortgage interest to 4% across the board. This would give more people the ability to stay in their homes instead of the adjustable rate mortgage that they are now enduring which ultimately puts them into a situation where they cannot afford their monthly mortgage payments. Banks are greedy and by not giving the homeowner the above chance, they end up taking back a home under foreclosure ruling and in the end, lose out as they do not recoup the value of the home and it puts everyone in a no win situation. Based on mortgage interest rates, many first time home buyers do not realize the impact that the monthly payments will have on their net income. Many times borrowers are not told of all of the other factors that enter into a mortgage payment such as insurance, taxes, etc. Taking of this into consideration would make many realize that the payments would escalate beyond their means. This would also help the borrower when setting up their monthly budget.
Another suggestion would be to encourage current homeowners the opportunity to refinance. If the mortgage rate is lowered to 4% and homeowners could refinance at this rate, this would not only make the monthly payment more affordable but it would also be putting additional dollars in their pockets, possibly to be used for home improvements, which would further stimulate the economy by providing work for contractors. Contractors everywhere have been affected by the current economic situation, not only due to the decrease in new home construction but also a big decline in any kind of home improvements. Stimulating the economy by providing more jobs is key in these hard economic times. Unemployment is at an all time high and without jobs; mortgages go unpaid and far too often fall into foreclosure.
A final suggestion would be to scrutinize the banking industry and all departments responsible for handing out mortgage loans to individuals who do not have the means to provide payment. They need a full disclosure form that would list all outstanding loans and research this area to be assured that the consumer is honest in their application and not already involved in high credit card or other debts which would...