No doubt you have been hearing about the mortgage crisis in America. What is that all about, and how did it happen? The recipe is simple. Add questionable lending practices to one part consumer ignorance, mix vigorously, and heat in a booming economy. Voila. You have a mortgage mess and lots of foreclosures.
A little history is in order. In the early part of this decade, many regions in this country enjoyed a “housing bubble.” In those areas, property values increased dramatically due to low interest rates and subprime lending standards. Sooner or later the bubble was going to burst, and burst it did. Home sales and prices began to drop. Meanwhile rising interest rates pressured homeowners with adjustable rate mortgages who were not able to meet their financial commitments.
All of these factors made the collapse of the subprime mortgage industry inevitable. While the attempt to provide families with homes may be a noble enterprise, there have been concerns with some in this industry. Subprime lending is the practice of making loans to people with credit scores below the average. Consequently, these borrowers incur interest rates that are higher than the average.
The mortgage crisis presents both a concern and an opportunity. The concern is what will happen to the millions of Americans who may lose their homes through foreclosure. The current mortgage delinquency rate is already twice what it was last year. There is every reason to believe that the percentage of foreclosures will continue to increase.
The opportunity is for families that may never have been able to own a home. While Christians would never want to profit from someone else’s misfortune, the sad reality is that many of these homes will be empty. A couple that has always wanted to have a home of their own might actually be able to buy a home at the fraction of its original value. But they should also learn a lesson from those who lost their homes and carefully count the cost before they sign on the dotted line.
We seem to be headed for a crisis, but even in the crisis there may be an opportunity. I’m Kerby Anderson, and that’s my point of view.
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It has been shown that many houses that have gone to auction block have brought 25 to 30 percent less than market value. Those who are in jeopardy of foreclosure should be allowed to re-finance their homes at that lower figure with a fixed rate mortgage. Many real estate companies have colluded to raise housing prices, and the lending institutions have been negligent to have properties honestly appraised. Many times the appraiser will appraise the property for what the real estate company says it is worth, rather than do an honest appraisal. Bankruptcy is another alternative for financially destitute families. Chapter 7 is no longer allowed, but Chapter 13 allows for payments that can be reasonably met by the particular family; and the house is usually allowed to be kept. There are several instances of debts being forgiven in the Bible. These are just some thoughts on the matter. George Cancilla Click here to reply to this post
