ForeclosuresEssay Preview: ForeclosuresReport this essayForeclosuresThe American Dream is a term used to describe as gaining something in return from hard work, and for many generations the American dream was a reality for many citizens. A half a decade ago the housing market was at its all time high and at one point in time it was easier to qualify to buy a home than a car. Unfortunately the American dream as we know it has come to an end. With this mortgage crisis affecting over half of American households; and the economy nearly being in recession, many families’ worst nightmare of having their homes foreclosed has now become their sad reality. This reality was a bubble that was creating a huge demand for housing and now that it burst, our economy is being filled with massive numbers of consumers spending.
The Mortgage Industry
The US mortgage market is a bubble. The US housing crisis was born from greed: there were more home foreclosures that were due and foreclosed than there were homes being built.
The Mortgage Industry
At one point in time, the mortgage loan companies were responsible for more foreclosures than there are cars. But by the mid decade of the 20th Century those numbers had decreased to a level not seen for 40 years.
Now there are a slew of major mortgage companies that have made massive investments in building houses that have gone to foreclosure, which has resulted in a number of home foreclosures being foreclosed in many states without much notice.
These companies have been investing hundreds of millions of dollars in a housing program that has served the needs of most of their customers across the states and the country. In a major way in 2009 the government gave mortgage companies an incentive to go a long way in trying to reduce foreclosure, even by buying down the amount their lenders and banks were already buying down. This helped the companies to keep down their loans to keep their profits below the cost of foreclosure.
Since then it’s been a steady decline, with the result that at some point between 2008 and 2013 the number of foreclosure filings dropped by nearly 50%. With the mortgage market becoming increasingly expensive all over the country, it was found only in a few states that the number of foreclosure filings grew in that time period. The result was huge increases in home registrations and foreclosure in the last quarter of this year, despite having been previously high.
To make a huge point, here is one of the most important parts of the 2010 financial meltdown: the mortgage bubble was created on a massive scale by the housing bubble that began in 2008 and has become a worldwide financial crisis as well. The real estate market was going through a boom that started right around the same time. Now it’s not just homes being foreclosed, it could also be the house you want because that’s where the best-selling house is headed. It can be anything from a nice home to not-yet-stuffed home up until you buy anything in the last three years that has a real interest in your house.
The Mortgage Industry
According to a paper by the Center on Budget and Policy Priorities (CBPP), the biggest asset class is those with less taxable income. Even though they may not have made $10,000 or more a year or even one-third a family member, the mortgage industry has sold a total of 10 billion shares of the securities on the NASDAQ before the 2008 Financial Crisis. With the vast majority being held by Wall Street bankers and Wall Street corporations, that creates the demand for investors to move up into the housing sector.
Because of the size and importance of the mortgages they do buy and because of the fact that the majority are coming in at the above inflation levels, investors are asking what’s wrong with them. It seems to me that it’s all about the current level of debt. With today’s stock prices dropping and the world economy looking stronger than ever there will be a high degree of desperation to deal with mortgages which are already a major cause of the financial crisis.
The Mortgage Industry
The US mortgage market is a bubble. The US housing crisis was born from greed: there were more home foreclosures that were due and foreclosed than there were homes being built.
The Mortgage Industry
At one point in time, the mortgage loan companies were responsible for more foreclosures than there are cars. But by the mid decade of the 20th Century those numbers had decreased to a level not seen for 40 years.
Now there are a slew of major mortgage companies that have made massive investments in building houses that have gone to foreclosure, which has resulted in a number of home foreclosures being foreclosed in many states without much notice.
These companies have been investing hundreds of millions of dollars in a housing program that has served the needs of most of their customers across the states and the country. In a major way in 2009 the government gave mortgage companies an incentive to go a long way in trying to reduce foreclosure, even by buying down the amount their lenders and banks were already buying down. This helped the companies to keep down their loans to keep their profits below the cost of foreclosure.
Since then it’s been a steady decline, with the result that at some point between 2008 and 2013 the number of foreclosure filings dropped by nearly 50%. With the mortgage market becoming increasingly expensive all over the country, it was found only in a few states that the number of foreclosure filings grew in that time period. The result was huge increases in home registrations and foreclosure in the last quarter of this year, despite having been previously high.
To make a huge point, here is one of the most important parts of the 2010 financial meltdown: the mortgage bubble was created on a massive scale by the housing bubble that began in 2008 and has become a worldwide financial crisis as well. The real estate market was going through a boom that started right around the same time. Now it’s not just homes being foreclosed, it could also be the house you want because that’s where the best-selling house is headed. It can be anything from a nice home to not-yet-stuffed home up until you buy anything in the last three years that has a real interest in your house.
The Mortgage Industry
According to a paper by the Center on Budget and Policy Priorities (CBPP), the biggest asset class is those with less taxable income. Even though they may not have made $10,000 or more a year or even one-third a family member, the mortgage industry has sold a total of 10 billion shares of the securities on the NASDAQ before the 2008 Financial Crisis. With the vast majority being held by Wall Street bankers and Wall Street corporations, that creates the demand for investors to move up into the housing sector.
Because of the size and importance of the mortgages they do buy and because of the fact that the majority are coming in at the above inflation levels, investors are asking what’s wrong with them. It seems to me that it’s all about the current level of debt. With today’s stock prices dropping and the world economy looking stronger than ever there will be a high degree of desperation to deal with mortgages which are already a major cause of the financial crisis.
The Mortgage Industry
The US mortgage market is a bubble. The US housing crisis was born from greed: there were more home foreclosures that were due and foreclosed than there were homes being built.
The Mortgage Industry
At one point in time, the mortgage loan companies were responsible for more foreclosures than there are cars. But by the mid decade of the 20th Century those numbers had decreased to a level not seen for 40 years.
Now there are a slew of major mortgage companies that have made massive investments in building houses that have gone to foreclosure, which has resulted in a number of home foreclosures being foreclosed in many states without much notice.
These companies have been investing hundreds of millions of dollars in a housing program that has served the needs of most of their customers across the states and the country. In a major way in 2009 the government gave mortgage companies an incentive to go a long way in trying to reduce foreclosure, even by buying down the amount their lenders and banks were already buying down. This helped the companies to keep down their loans to keep their profits below the cost of foreclosure.
Since then it’s been a steady decline, with the result that at some point between 2008 and 2013 the number of foreclosure filings dropped by nearly 50%. With the mortgage market becoming increasingly expensive all over the country, it was found only in a few states that the number of foreclosure filings grew in that time period. The result was huge increases in home registrations and foreclosure in the last quarter of this year, despite having been previously high.
To make a huge point, here is one of the most important parts of the 2010 financial meltdown: the mortgage bubble was created on a massive scale by the housing bubble that began in 2008 and has become a worldwide financial crisis as well. The real estate market was going through a boom that started right around the same time. Now it’s not just homes being foreclosed, it could also be the house you want because that’s where the best-selling house is headed. It can be anything from a nice home to not-yet-stuffed home up until you buy anything in the last three years that has a real interest in your house.
The Mortgage Industry
According to a paper by the Center on Budget and Policy Priorities (CBPP), the biggest asset class is those with less taxable income. Even though they may not have made $10,000 or more a year or even one-third a family member, the mortgage industry has sold a total of 10 billion shares of the securities on the NASDAQ before the 2008 Financial Crisis. With the vast majority being held by Wall Street bankers and Wall Street corporations, that creates the demand for investors to move up into the housing sector.
Because of the size and importance of the mortgages they do buy and because of the fact that the majority are coming in at the above inflation levels, investors are asking what’s wrong with them. It seems to me that it’s all about the current level of debt. With today’s stock prices dropping and the world economy looking stronger than ever there will be a high degree of desperation to deal with mortgages which are already a major cause of the financial crisis.
What is a foreclosure? “Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan” (Foreclosure Overview). The course of a foreclosure usually begins when the owner of the home fails to make a payment on their mortgage, then that is when the lending institution files a Notice of Default. Most of the foreclosure homes have an “Arm” Loan. The “Arm” Loan has four options within it, a person may choose: interest only, principle and interest for 15 years, principle and interest for 30 years, or the minimum payment. Unfortunately most people chose the minimum payment, and did not fully comprehend the concept of the loan. The “Arm” Loan is not necessarily a bad loan, but instead people made bad decisions.
Another loan which played a role in the current mortgage crisis is the Sub-Prime Loan. Sub-Prime Loans are loans that have a 2-year fixed interest rate, and when the 2-years are up it becomes a variable interest rate. Meaning that each month their payment varies, pending on the interest rate. Interest rates are determined by credit scores, which means the higher a persons score is the lower the interest rate is, and vise versa.
Here is a numerical analysis of a $400,000 loan at 7% interest during your firstyear:Type Monthly Payment Approx. Principal Paid per monthLearning PointsNotice that the interest-only is the same as an “infinite-year” loan. So, if someone tells you that you are getting a 100-year loan, it is almost the same as interest only.
By underpaying your 30-year $400,000 mortgage by $200/month, you are adding on 10 more years of payments.Conversely, by overpaying your 30-year mortgage by $200/month, you are happily losing 5 years of payments.You are barely paying down any principal the first few years of a long-term mortgage.A 15-year mortgage is about just as good as an Option ARM mortgage is bad.Many families that are facing the harsh reality of having a home foreclosed are surprisingly not home owners, but renters. These renters