Psychological Effects on Subprime Mortgage Crisis Essay Example for Free

Psychological Effects on Subprime Mortgage Crisis EssayThe day of owning a home was a wonderful experience that Janet Wilson discovered by and by closing on her first home. Shes a single mother with two sons and when her loan officer explained that her mortgage loan would be approve and she felt up her dream of homeownership will be reality. The closing costs were at a minimum due to the loan officer explained it would be an easy closing with pocket-size out of pocket costs. Janet worked for a healthcare organization for several years and was able to save enough money to buy needed furniture for her home. Janet enjoyed her smart home and fin solelyy felt the independence and accomplishment in her life. At 45 years old, she waited a long time witnessing others in her family and friends reaching that finis of homeownership. Janet desperately wanted to reach that goal as well as experience the feeling of obtaining the American dream. In deuce-ace years of homeownership she was able to even out her mortgage with no problem and was able to start to re-decorate her home. Her boys loved the neighborhood and had developed close friends their age.Ms.Wilson forgot all her about her closing until one day she current in the mail a letter from her mortgage company that her interest rate is being increased. Janet saw her new adjusted mortgage retribution and she closely fainted with disbelief. She was extremely concern of why she wasnt informed of this possibility from her loan officer at the initial closing. Janet called the mortgage company and they showed no compassion that make the ordeal even more stressful. Janet did not know what to do and the fear of losing her dream home and not having a roof over her sons head made the situation completely worse.After a couple of months passed with the increased mortgage payment in effect, Janet was unable to make the mortgage payment so then a barrage of letters was received about a pending planned foreclosure. Janet could not work, sleep, or eat due to the coarse stress about the horrible thought of having no place to live and becoming homeless. The thought of losing her home and turning her life upside down with the machine-driven backlash on her credit score brought psychological effects to her mentality.She knew it would be harder to get another residence to live with bad credit score and with her special amount of income. According to Steve Bergers article Legislators presiding over the subprime crisis hearings should look in the mirror and pose a few hard questions before assigning all blame to raiding lenders and mortgage brokers (Berger, 2007). Ms. Wilson experience was the fundamentals of many other in the mortgage meltdown. With limited regulations in place when Ms. Wilson took out the mortgage loan, the predatory lenders gain an opportunity to make money on the backs of someone else dream.There a great deal of pundits stating that many are to blame and that nearly three out of ev ery four subprime mortgages originated by brokers were either fraudulent or misleading tactics used to trick borrowers and lenders (Bitner, 2008). In the meantime, Janet Wilson is facing foreclosure and in a difficult position to choosing what to do in her stressful crisis. She is torn between trying to save her home with a tight budget or to passport away due to the limited availability to avoid paying the increased mortgage payment.Janet is listening to every news update on the government commence to assist homeowners in the mortgage crisis as the investors were assisted. In addition, to the rise of foreclosures across the country similar to the situations like Janet Wilson, the financial industry must and will transform in order to necessitate the United States economy back on track (Lee, 2003). In the meantime, the homeowner is stuck not knowing what tomorrow will bring or if their home will be taken away due to misleading practices.