BUSINESS AND PERSONAL LAW. Foreclosure and the Foreclosure Crisis . DECEMBER 17 , 2013. Intro Video-FORCLOSURE. http://video.pbs.org/video/1513485417/ WHEN YOU WATCH….THINK…
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People hope their houses will increase in value over time, so when they are ready to leave it, they will make enough profit on the sale to both pay off the mortgage and have some cash left over as a profit.
Many homeowners leading up to, and during the foreclosure crisis chose to refinance their homes. For borrowers who were struggling, this may have been done to reduce the monthly repayment amount (often for a longer term, contingent on interest rate differential and fees)
For many homeowners, this was done to AVOID foreclosure. This means that the homeowners took out a new loan with the bank and agreed to NEW terms (interest rates, etc.) in order to be allowed to continue making payments on their home. The old loan was a thing of the past.
There are numerous ways that the banks could have foreclosed illegally – this is just ONE example. Note, however, that not all bank foreclosures are illegal – many/most are completely legitimate.
Keep in mind that simply because a bank foreclosure is not illegal does not necessarily mean that the bank, when negotiating the initial mortgage OR refinancing the home, was being “fair” to the homeowner.
A lot of people were taken advantage of (by being able to take out loans/mortgages at rates that were beyond their means to pay), but their homes were still foreclosed on legitimately and legally.