COM 1388 Rasmussen College Mortgage/Lease-option Complete the final draft of your course project. You can review the detailed requirements for the course p
COM 1388 Rasmussen College Mortgage/Lease-option Complete the final draft of your course project. You can review the detailed requirements for the course project proposal on the Module 01 Course Project – Introduction page.
Be sure to include all required components of the proposal:
Title page
Table of contents
Outline
Executive summary
4 – 5-page essay that includes purpose statement, problem, original and creative solutions and conclusion sections
Reference page with at least four sources, two of which must be scholarly
Visuals
Appendix if necessary (appendix can include other supporting documents).
This is what my instructor told me to fix.
Feedback to Learner 3/3/19 7:45 AM
Aimee,
It’s all there — except — who are you arguing this to (audience)? It’s not clear. Is it stricter mortgage guidelines you want for a specific bank? Federal law? State law? Just clear that up and it’s a slam dunk. Running head: MORTGAGING/LEASING
Mortgage/Lease-option
Aimee Darwin
Rasmussen College
Author Note
This paper is being submitted on February 26, 2019, for Howard Satinskys
G171/COM1388 Communicating in Your Profession course.
1
MORTGAGING/LEASING
2
Mortgage/Lease-option
Purpose
This paper seeks to discuss how most Americans are being disadvantaged by engaging in
mortgage contracts which are more disadvantaged over lease-option agreements which are more
beneficial and have a financial advantage and end up losing their homes. Mortgage contracts
tend to have more financial disadvantages as compared to lease-options agreements which got
less financial restrictions and complications. Bar-Gill (2008) holds that a mortgage contract is a
pledge made by the borrower that they are willing to let go of their property if they are unable to
repay the loan. If the loan is not met, it acts as a lien to the property. On the other hand, leaseoption agreement formally known as lease with the option to purchase is a contract useful in
commercial and residential real estate. The property owner and the tenant gets to an agreement
that at the end of a specified duration of renting for that given property, the tenant will have a
choice of being able to purchase the property.
Problem
A major problem facing most Americans is the unaffordability of mortgages to middle
and low-income earners. According to homeownership in the U.S.A 2016/ statistics (2019),
only 68% of all Americans adults own homes, while more than 70% of those owners have
obtained their houses through mortgages. Only 40% of these mortgage homeowners are capable
of having paid their homes (Becketti, 2017). While only a small percentage of less than 5% of all
American homeowners have purchased their homes through lease-option agreements.
Additionally, the increased number of mortgages in America has been activated by the
global financial crisis which occurred in the year 2008. This crisis led to less low income among
MORTGAGING/LEASING
3
the Americans pushing low-income earners and middle class to opt for a mortgage. This
financial crisis was the worst economic disaster after the Great depression of 1929 despite the
Treasury Department and Federal Reserve efforts to counter it.
This crisis led to the Great Recession which caused housing prices to fall off 31.8% more
than the price state during that depression. The crisis was followed by unemployment which was
above 9% even two years after the recession came to an end. Banks had allowed people to get
loans 100% or more the value of their new homes (Felton, & Reinhart, 2011). Housing prices
had started falling off making realtors happier that they forgot to identify there were a large
number of homeowners with their credit in question. The Gramm-Rudman Act permitted the
bank to engage profitable derivatives trade which they went ahead to sell to investors. These
mortgage-based securities required home loans as collateral. These derivatives brought a
tremendous demand for more and more mortgages.
Solutions or plans
The first step in discouraging mortgage contracts to help Americans stop losing their
homes, a mortgage should highly be discouraged. Campaigns should be thoroughly held to
sensitize home-owners on the disadvantages of mortgages and the financial benefits to accrual in
lease-option agreements. The sensitization will open up the minds of many Americans and,
before they make any choice, they will have to compare the two contracts and create a beneficial
choice which they will gain in the future.
Secondly, the cash option fee and other charges should be reduced. To attract many
Americans, 5% to 2% should reduce from the cash option fee of the lease agreement. This act
will leave many with a motive of trying the lease-option agreement over the mortgage contract
MORTGAGING/LEASING
4
and at the long-run end up owning a house rather than losing their homes. Alternatively, the
rented period for lease-option agreements should be increased to give more time to the tenants to
save up enough money to acquire the home soon when they qualify for purchase. The overall
cost of the property should also be reduced at a certain percentage as compared to the outright
payments. This encouragement is all in the effort to attract more and more Americans to try
lease-option agreements and escape the harsh terms of mortgage contracts which in most cases
end up leaving them homeless. The USA government should also make its intervention by giving
incentives to Americans to try out lease-option agreements. To achieve this government can
increase charges and taxes on mortgage agreements to discourage people and in return reduces
taxes and costs on lease-option agreements to motivate them to go for lease-option over the
mortgage agreement. Finally, the banks should put restrictions on license offered to banks which
deal with the mortgage business.
Conclusion
On a daily basis more and more Americans are getting into debts due to mortgage
contracts. This totals for over 75% of Americans with debts. According to the financial statistics
among the debts in the USA, housing debt remains the highest form of debt followed by the
education debt. People ought to wake up and stop engaging in mortgage contracts which are the
core source of these housing debts and try the life-saving lease-option agreements for the better
of tomorrows future generations and the economy at large. Lease-option agreements are way
cheaper and have more financial benefits in the long run as compared to the mortgage contracts.
Americans should take the step of safeguarding their future by engaging in beneficial deals for
sustainability and economic benefits, and the government should also be at first hand in saving
its citizen from unwanted debts and make the economy more favorable for Americans to thrive.
MORTGAGING/LEASING
5
References
Bar-Gill, O. (2008). The law, economics, and psychology of subprime mortgage
contracts. Cornell L. Rev., 94, 1073.
Accredited Website
Becketti, S. (2017). Why America’s Homebuyers & Communities Rely on the 30Year Fixed-Rate Mortgage. Retrieved from
http://www.freddiemac.com/perspectives/sean_becketti/20170410_homebuyers_communities_fi
xed_mortgage.html
Felton, A., & Reinhart, C. (2011). The First Global Financial Crisis of the 21st Century Part II:
JuneDecember 2008. Centre for Economic Policy Research.
Homeownership in the U.S. 2016 | Statistic. (2019). Retrieved from
https://www.statista.com/statistics/561961/homeownership-usa/
1
Running head: COURSE PROJECT OUTLINE
1. Purpose Statement: More Americans get into mortgage contracts that have more
financial disadvantages as opposed to Lease-option agreements (Rent to Own
Agreements), that have far less financial restrictions and complications. As such, more
Americans are losing their homes. This paper will discuss why this phenomenon is so and
the appropriate solutions to this problem.
a) Problem: Unaffordability of Mortgages to Middle and Low-Income Earners
I.
68% of all American adults own homes (“Homeownership in the U.S.
2016 | Statistic”, 2019).
II.
More than 70% of these owners obtained their houses via mortgages.
III.
Only 40% of all mortgage homeowners manage to fully pay for their
homes (Becketti, 2017).
IV.
Less than 5% of all homeowners purchased their home via lease-option
agreements.
b) Consequences of Increased Number of Mortgagers.
I.
II.
III.
The global financial crisis of 2008.
Increased prevalence of foreclosures.
Less low income and middle class people owning homes.
2. Creative and Original Solutions.
A. Discourage Mortgages.
1) Active campaigns to sensitize homeowners on the disadvantages of mortgages.
B. Reduce The Cash Option Fee and Other Charges.
2) Reduce the cash option fee from around 5% to 2% of the lease agreement.
3) Increase the rented period for Lease-option agreements.
COURSE PROJECT OUTLINE
4) Reduce the overall cost of the property as compared to outright payments.
C. Government Incentives to Get Into Lease-Option Agreements.
1) Increased taxes and charges on mortgage agreements.
2) Reduced taxes and other costs on Lease-option agreements.
3) Reduced licenses offered to banks engaging in the mortgage business.
3. Conclusion
1) More and more Americans (more than 75% are getting into debt).
2) Housing debt remains the most prevalent form of debt second to education debt.
3) Lease-option agreements are cheaper as compared to mortgages.
2
COURSE PROJECT OUTLINE
3
References
Accredited Website
Becketti, S. (2017). Why America’s Homebuyers & Communities Rely on the 30-Year FixedRate Mortgage. Retrieved from
http://www.freddiemac.com/perspectives/sean_becketti/20170410_homebuyers_communities_fi
xed_mortgage.html
Accredited Website
Homeownership in the U.S. 2016 | Statistic. (2019). Retrieved from
https://www.statista.com/statistics/561961/homeownership-usa/
Running head: LANDLORD/TENANT
1
Tenancy Agreement
Aimee Darwin
Rasmussen College
Author Note
This paper is being submitted on February 13, 2019, for Howard Satinskys
G171/COM1388 Communicating In Your Profession course.
LANDLORD/TENANT
2
Tenancy Agreement
Purpose
This paper seeks to delve into discuss a rental contract between a landlord and a tenant
with an option to purchase the said property. Seddon (2015) holds that rental contracts are a
legally binding agreement between a landlord and tenant to let, pay and utilize the said property.
The contract has to meet all the legal elements of a contract, such as offer, acceptance, and
consideration among others for it to be enforceable as was held in Carlill vs. Carbolic Smoke
Ball Co. Ltd [1892]. A contract or deed between a landlord and a tenant may be for a specific
period or unspecified duration.
A landlord and a tenant may, without any kind of duress or misrepresentation, enter into a
rental contract with an option of purchasing the property. These kinds of contracts should be
drafted properly, have water-tight clauses that protect each partys interest and well executed.
The parties may register the said agreement (Petersons, 2010).
Problem
A major challenge with rental contracts in the presence of an agent during the negotiation
of the purchase or renting the property. Tenants bear the burden of meeting administration costs,
contract costs, administration fee and at times the legal fee for all parties involved in the
transaction.
Other problems or challenges would be poor maintenance of the premises by the
Landlord, delayed repairs, lack of proper communication by the landlord, failure to issue a tenant
his or her deposit for the house and utility costs back. Landlords, on the other hand, are not
spared as they suffer a number of challenges while implementing their landlord-tenant
agreement. Some landlords allow tenants to move in before signing an agreement, allowing
tenants into their properties without receiving into their bank accounts the first rental payment
and deposit.
LANDLORD/TENANT
3
Solution or Plan
Therefore, landlords should not let tenants into their properties without getting into a
well-executed and legally binding tenancy or rental agreement. The agreements should have
clauses which seek to protect and promote interests of both the landlord and the tenant
(Petersons, 2010). In the event where a third party, such as an agent, is party to the agreement, a
tenant should not bear the costs of the agent’s services. This is because an agent, according to
agency law, is an employee of the principal, that is, the Landlord.
Conclusion
Therefore, this paper shall seek to establish the relationship of a landlord and tenant in a
rental agreement with an option to purchase it, the problems and challenges experienced by both
parties and the available solutions.
LANDLORD/TENANT
4
References
Petersons, (2010). Master the real estate license. Lawrenceville: Petersons.
Seddon, N. (2015). Seddon on deeds. USA: Federation Press.
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ICXL
FINAL WRITTEN
PROPOSAL
Title page
Table of contents
Jutline
Executive Summary
Contains four headings (Purpose, Problem, Solution,
Conclusion)
Proposal main
Contains four headings (Purpose, Problem, Solution,
Conclusion)
Reference page
Purchase answer to see full
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