Community Reinvestment Act And Subprime Mortgage Crisis

by : Dana B. Smith

Most consumers who are searching for answers and explanations regarding the mortgage crisis which started threatening the United States, are usually blaming the community reinvestment act. Although the community reinvestment act subprime mortgage has been long taken into account, there are some people who still consider that if the community reinvestment act would not existed there would still be a lot of owners who would be renting. To analyze and determine who is right or wrong is not easy at all, and the purpose is not to judge, but to find proper answers for these questions and provide the appropriate solutions.

A difficult and unfair situation that the community reinvestment act must handle is concerning some people who received substantial loans but had not the necessary qualifications. The critics are throwing the guilt at the community reinvestment for this and the entire country is facing a critical moment, no one is going to take full responsibility for the situation. Even if the community reinvestment act crisis is going to extent, most people's opinion is that the mortgage crisis problem is due to the fact that plenty of the borrowers of subprime mortgage crisis had to adopt an ARM mortgage so that they could have the desired home.

Although there is a large number if borrowers who are defaulting the community reinvestment act, there still are some of the helped borrowers who are not fulfilling their loans. Generally, the dollar's dropping down, the insecurity of the economy and the shocking interest rates, have led to very slippery and dangerous financial situation. Most borrowers who were not able to get a home loan, had no other option but to choose and ARM mortgage, and the effects of this decision will definitely be noticed in the evolution of the interest rate during the future years.

Even if some difficult periods are longer, the ARM mortgage will adapt to the latest interest rate in only 5 years. No matter the period of the locked in interest rate, always exist situations in which the interest rate is higher than the one at which it needs to be reinstalled. An important aspect of this matter is that the change of the interest rate can have a negative impact on the mortgage payment and, thus affecting the borrowers. When making such an adjustment it must be taken into consideration the fact that the borrowers could lose their homes.

However, the homes that are being affected and trapped into foreclosure is decreasing, but the fight and blame regarding the community reinvestment act subprime mortgage crisis continues in the whole country. The situation is unstable considering the fact that there are people who were helped by the program, but there are still many who are facing and being displaced by the consequences of the subprime mortgage crisis. In time, more answers will be revealed concerning the program and its success, but until then it will take some time, patience and strength. The only solution is to try to face the situation as it is and keep struggling because giving up is not a solution, is only the poorest alternative.