Problems faced by mortgagors Essay Example | Topics and Well Written Essays - 750 words

Problems faced by mortgagors - Essay ExampleIt is beca subprogram of this reason that mortgage products have force very popular across the world and they have enabled many people become homeowners. However, mortgage facilities expose certain problems to the borrowers, which will be discussed in this present essay and even how they affect the economy of the joined States. Secondly, the essay will discuss recent act of legislations or proposal by the coupled States federal government that pertains to the problems that would be highlighted. The nature of mortgage facility is that the borrower pays a monthly premium plus pursual which is flexible meaning that the rate of the interest may increase or decrease depending on the securities industry condition. Baily stated that borrowers problems usually arise when the rate of interest in the mortgage market increases while their income, which they use to repay the mortgage, remains steady (68-71). This therefore, creates a scenario whe reby the borrower is unable to satisfactory pay the monthly premiums and interest, which then forces the confide to enact the foreclosure agreement that would leave the borrower homeless. Such a problem derails the entire economic growth of the United States, which is still on a recovery phase, and unemployment is still an issue since according to Baily lower purchasing index number by the consumers who are servicing high interest rate means low demand for goods and products (33-35). Bolat and Coles also lamented that presently borrowers have been locked with high interest rates despite the fact.