U.S. Home Foreclosures Soar comment on this subject for my research paper?

Question

U.S. Home Foreclosures Soar comment on this subject for my research paper?

Answer 1

The Economist has had extensive articles about this, see if you can find the most recent one at your local library, you should be able to get lots of info from it.

Answer 2

Most of the foreclosures are arising from this loan that was originated called an ARM (adjustable rate mortgage).  These loans give you the option of 4 pmts; minimum pmt, interest only pmt, 30 yr amortized pmt, and 15 yr amortozed pmt.  The minimum pmt would not cover the interest, thus increasing the actual amt owed on the loan more and interest getting charged on interest, interest only would cover only that and would leave the loan balance at exactly what it was when started if paid every month, 30 yr would pay off loan in 30 year loan if paid every month, 15 yr would pay off loan in 15 yrs. if paid every month.  Many of the people did not realize this option and opted to make the minimum pmt.  only to increase their loan.  Another aspect of this loan was the fact that there was only a limit of time this was offered.  When the loan balance reached 103% of the loan it would automattically change to a 30 yr amortized, increasing to a pmt many could not afford.  Third big thing about this loan is that it is based on the prime rate + a certain percent issued int he loan docs.  If prime is at 5% and your loan docs state + 15% you would be paying 20%, this fluctuated the actual cost of the monthly pmt options except the minimum pmt for generally the first 1 or 3 years.  When the interest rate would go up of the minimum pmt time expired people would start calling with the fact that they could not afford the pmt.  Their only options, refi, make pmt, or foreclosure.  Refi became impossible because they made min. pmts and their house was now less than owed and mortgage companies would not take the chance of giving them that loan.  Making pmt became impossible because they weren't able to make the extra money, so foreclosure ends up being the only option.  Greenspan stated in an interview that they knew this would be possible, but didn't realize that it would effect the economy so drastically.  Personally, I thing all the greedy b*st*rds trying to make money on unfortunate people deserve it.  I, however, feel no sorrow for anyone who didn't read the loan documents to understand their loan or even read it to see if they just sold their liver.  Hope your paper is a success!!

Answer 3

Although what banks and lending institutions have done is shady, it is not ther responsibility to make sure that they buyer is purchasing something they can truly afford.

A lot of people bit off more than they can handle, not mention a bigger home usually mean bigger cost of up keep.  Not only have rates increased so have fuel cost and heating costs.   People were already stretched have become even more stressed.  There are plenty of places to learn about how much debt you should take on when you buy a home, but few people look at this information, instead they blame the bank when they find themselves over their heads.

Answer 4

that is not a question and has absolutely nothing to do with homeschooling, which is the topic of this branch of the forum.

Answer 5

You can resume everything in one word " GREEDY"

Banks, mortgage companies, loan officers, brokers, real state agents.

they look and found a way to make millions of dollars curving the system, not following the rules that were in place.

once the money start coming  in a lot of banks create different programs to make a loan easier, faster, it became quantity and no quality that why we are in this situation now

Answer 6

The number of speculators across the United States were unprecedented over the past 3 years.  There were so many people buying homes for flipping.  People bought them in a rush to flip them some more as a secondary and third market.

In short, gamblers were gambling over and over again until finally the market ran out.  The consumers in the middle were the ones hurt.