Dissertation > Economic > Fiscal, monetary > Finance, banking

The Study of the Legal Protection of the Borrowers of the U.S. Mortgage

Author ZhangWei
Tutor LiuWen
School Southwestern University of Finance and Economics
Course Economic Law
Keywords mortgage borrower financial institution benefit protection
Type Master's thesis
Year 2011
Downloads 47
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The U.S. government launched a series of mortgage policy to accelerate the development of the real estate market. The financial institutions also designed a great variety of financial derivatives to encourage the lending. More and more people owned their homes by these loans.However, this was the right fuse of the crisis.The real estate market bubble finally bursted. More and more people were unable to pay the mortgage and been homeless. The United States fell into a unprecedented financial crisis.Buying and owning a home is a riskier proposition for families than renting. Buyers take on enormous debts, sign 30-year mortgage contracts, and become responsible for the maintenance costs of their home.Because foreclosure can devastate a family.s economic and social standing, as well as destabilize neighborhoods, making sure families have sufficient personal financial management skills is more than an ancillary issue. Consumers infrequently apply for loans and typically do not understand the complexity of the mortgage transaction. Lenders and real estate professionals, in contrast, engage in these transactions frequently. This presents an information asymmetry between parties in the transaction. Loan applicants, especially first-time buyers, rely on information provided by others. Due to the wide variety of loan products and pricing structures, comparisons of loan terms, fees and requirements are difficult. Consumers often cannot evaluate if the loan they have been offered is a good deal. Even after closing on a home, new homeowners often need help in understanding any recourse they might have, as well as how and when to refinance their mortgage or sell their home. As homeownership is expanded to more low- and very-low-income people, public policy must ensure that buyers understand their rights and responsibilities. Financial education provided by community organizations in partnership with financial institutions can help families enter the mainstream financial sector, successfully find the best deal and a fair loan, as well as increase their capacity to handle financial emergencies.I think the fundamental reason for study was the lack of concerning the mortgage borrower’s interests.This article is divided into four parts to analysis this problem.First part is the U.S. mortgage origin and development of the legal system. Second, the cause of protecting the U.S. mortgage borrowers and the interests. Third,I analysis specifically about the legal system of protecting the U.S. Mortgage borrowers. Finally, I considerated the ituation of our country to conclude some suggestions about the protecting of the mortgage borrowers, and made some institutional recommendations.

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