The American Dream Of Homeownership

However, hope might be on the horizon for the victims of the mortgage disaster of 2007/2008. Home buyers who were foreclosed upon years ago, or boomerang buyers, are beginning to be eligible to buy homes again. While some feel hope after feeling bamboozled by lenders and Fannie Mae and Freddie Mac, some feel anxious and fearful of the thought of buying again. Yet there are lessons that have been learned by the mortgage meltdown. Fannie Mae and Freddie Mac provided a lesson for the

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

Home ownership is the American dream! It is one of the most costly purchases an individual or family can make in their lifetime. Some people save until they have cash to purchase however, many people borrow money from a bank or lending institution; when a person borrows money to purchase a home the loan is called a mortgage. The lender is called the mortgagee and the borrower is called the mortgagor; banks have several different types of mortgages: fixed rate mortgage, adjustable rate mortgage, investment mortgage and much more. Borrowers have to undergo the lender underwriting process to show financial capability of repaying the mortgage (Makarov & Plantin, 2013). In this article I will use a fictitious person named “Julianna,” she is in the process of buying her first home at age 30; I will be her lender and will use mathematical procedures to find out what is her down payment, principle, installment payment, points (closing cost), mortgage maturity value and total interest paid.

The housing crisis of the late 2000s rocked the economy and changed the landscape of the real estate business for years to come. Decades of people purchasing houses unfordable houses and properties with lenient loans policies led to a collective housing bubble. When the banking system faltered and the economy wilted, interest rates were raised, mortgages increased, and people lost their jobs amidst the chaos. This all culminated in tens of thousands of American losing their houses to foreclosures and short sales, as they could no longer afford the mortgage payments on their homes. The United States entered a recession and homeownership no longer appeared to be a feasible goal as many questioned whether the country could continue to support a middle-class. Former home owners became renters and in some cases homeless as the American Dream was delayed with no foreseeable return. While the future of the economy looked bleak, conditions gradually improved. American citizens regained their jobs, the United States government bailed out the banking industry, and regulations were put in place to deter such events as the mortgage crash from ever taking place again. The path to homeowner ship has been forever altered, as loans in general are now more difficult to acquire and can be accompanied by a substantial down payment.

In conclusion, homeownership in the United States have decline over the past years even being the lowest it has ever been, but has had an improving and strong market beginning in 2012 after a 27% decline from the 2006 peak, and the increasing homeownership rate is a worthwhile policy to allow the United State economy to

America is seen as the land of opportunity in that there are endless possibilities for an individual. In this land of opportunity, Americans strive to obtain the ideal known as the American dream. The American Dream is seen as the accomplishment of an ambition achieved while challenged by adversity.1 Americans often associate this success with the ownership of a home. The home is not simply a place of basic protection; there is a much deeper connection to the individual. Ownership of a home grants freedom and security that establishes a sense permanency for the individual. In contrast, renting a living space possesses a semblance of instability and dependence.2 The desire to improve ones’ position in life inspires one to

In the lead up to the current recession, when the real estate market began to fall, there were so many investors shorting stocks and securitized mortgage packages that were already falling, that the market simply fell further. There were no buyers at the bottom, and the professional investors made millions off of the losses of others. Beyond this, there was no real federal regulation for securitized mortgages, since there was no real way to gauge the mathematical risk of any given package. This allowed the investors to take advantage of the system and to short loans on real people’s homes. Once these securities were worthless, many of the homebuyer’s defaulted on their mortgages and were left penniless. No matter from which angle this crisis is looked at, the blame rests squarely with the managers who began the entire cycle, the ones who pursued the securitization of mortgages. Their incompetence not only led to the losses of Americans who have never invested in the stock market, but to losses for their shareholders.

The economic decline has possible home buyers, especially first time home buyers, scared to invest anything into the housing market. With the fear of another depression in the back of everyone's minds, some businesses are attempting to clarify the pros of home ownership.

Homeownership is the American dream and the U.S. Department of Veteran Affairs (VA) makes it possible for veterans, and eligible spouses who serve finance the purchase of their own homes. With the help of the VA, banks and other mortgagees are able to provide favorable home loans with a comparable lower interest rate, as well as, VA home loans zero down in Ocala, Florida. These loans are flexible and can be used to purchase your own home or to repair, build, adapt or retain your personal property. The term veteran refers to active duty service personnel, certain members of the Selected Reserve and spouses of a certain category. This means that residents in Ocala, Florida who are categorized as veterans should take advantage of a VA home loan if homeownership is in your near future.

Europe and elsewhere to the United States, and from the east to the west within the

Following the 2006-2008 housing market crash, 4.8 million of homeowners lost their most valuable assessment to foreclosure, and another 2.8 milliongave up their homes in short sales. These former homeowners that are reentering the housing market after losing their homes during the housing market financial crisis are now part of a wave of “boomerang buyers.” According to Real Estate experts, boomerang buyers who are returning to the market were at least 10 percent of all United States home purchases during 2014. More important, this trend is expected to increase in 2015 and 2016 as more boomerang buyers become eligible for new options to get their dream homes again. The unquestionable fact is that a great majority of boomerang buyers are hardworking, honest people that got caught in the middle of one of the biggest housing crisis that occurred in the last 100 years. Fortunately, those housing crisis’ victims are beginning to see the light at the end of the tunnel since several options are becoming available to them in order to get back into home ownership. Among these options, I like to explore some available avenues for those boomerang borrowers to include the rent to own option, Veterans Affairs backed loans, and owners financing option.

The recent recession that began in 2007 and led to the stock market crash of 2008 was partly due to real estate and the mortgage market, and it was portrayed in the newly released movie, The Big Short, adapted from the book The Big Short: Inside the Doomsday Machine by Michael Lewis. The book is about the creation of the housing and credit bubble during the early 21st century and how it burst, causing the 2008 recession. It sheds a spotlight on specific individuals who predicted the crisis before anyone else did. The book is important to read because it explains how housing mortgages and loans work, in addition to showing how critical real estate is to the U.S. economy. The housing crash had several factors, but members of the industry should have conducted more research to have avoided such problems. The American public should have knowledge about real estate concepts and terms, for they are important in purchasing houses, investing, and making better business decisions that hopefully don’t lead to another

The new construction market in the mid 2000’s was flourishing. People saw building a home as an opportunity for a solid investment because prices and rates were so low that certain homes could depreciate extremely slowly. However, there would be a negative effect from all this low-cost new construction and few were aware of just how devastating it would be to the new construction market.

With all of the incentives and mortgage products given so easily to people that couldn’t afford the high prices (including interest rates), many people defaulted on their first mortgages because they were no longer were able to receive the profit from the homes they first intended to flip. “During the first quarter of 2008, nearly 9% of all mortgage holders were delinquent or in foreclosure, the highest rate since recordkeeping began in 1979. Foreclosure filings more than

Establish Credibility: According to US News, the great American dream of owning a home appears poised for a comeback. Real estate company Trulia reports that in many parts of the country, rents are rising while housing prices are falling, making buying a home more affordable. Trulia found that in 98 out of 100 major metropolitan areas, including Detroit, Atlanta, and Cleveland, buying has become more affordable than renting.” I think the mortgage catastrophe of 2001 left prospective home buyers afraid of buying a house without being extremely certain that is the right decision.