Capstone Project Finance (Final Project)

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CAPSTONE PROJECT

Project Title: APPLICABLE FINANCIAL POLICIES CHANGES THAT CAN BE USED TO ENCOURAGING HOUSE AND HOME OWNERSHIP IN MICHIGAN

Submitted by:

Submitted to University MBA/MS Program [list one]

Capstone Mentor: [name]

For University Use
Date Received: ______________________________________________ Reviewed by: _______________________________________________ Approved/Disapproved: ______________________________________________ Signature: ______________________________________________ Date: ______________________________________________ Comments: ______________________________________________

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Abstract
The need to encourage house or homeownership has been in the government’s strategic plan since 1934, however, the current financial policies and practices in the housing finance and the mortgage market has characterized by minimum flow of capital in the secondary mortgage market, confusion on the main control authority and various ill practices. This fact has necessitated various changes in the house and homeownership financial. This study collected both primary and secondary data, and found out that the government must set the right policies that will empower house and home consumers to circumvent biased practices and practice informed decision making, these sentiments. There must be an improvement in the foreclosure processing and mortgage servicing, notably, from the beginning of the last financial crisis, foreclosures and NAR tried to work by administrators and regulators to formulate criteria for decreasing the risk of foreclosure. There should be increased capital availability to creditworthy borrowers from all communities and states including Michigan. The study has also revealed that more solution based research is necessary than general solution researches. Keywords: financial policies, house and homeownership, and mortgage.

Dedication
This project has been dedicated to those who believe that financial policy making is a joint responsibility, for every United States citizen, and it should not be left to the government and politicians. It has also been dedicated to those who believe in acquiring their own homes as a step towards fulfilling the upper needs in the Maslow hierarchy of needs.

Acknowledgement
First, I offer gratitude to God almighty the giver of life and strength to complete this project. Second, my gratitude goes to my Tutor and all participating members in the Capstone project committee. Third, I offer my greatest gratitude to all the members Corporation for Enterprise Development (CFED), who conducted the 2012 Assets & Opportunity Scorecard, they highlighted the lower score leading to a grade of C for Michigan State’s Housing and Homeownership, and they brought to my attention the problem of low house and homeownership in Michigan. Last but not least, is gratitude to the Michigan Chamber of Commerce (MCC), for suggesting the need to amend financial policies that encourage house and home ownership in the State of Michigan.

Table of Contents
List of Abbreviations8
Chapter 1: Introduction9
1.1 Background of the Problem9
1.2 Statement of the Problem9
1.3 Purpose of the Project/Study10
1.4 Significance of the Project10
1.5 Nature of the Project11
1.6 Research Questions12
1.7 Theoretical Framework12
1.8 Assumptions12
1.9 Scope and Limitations13
Chapter 2: Literature review14
2.1 Historical Overview: Development of American Housing and Home Financial System14
Federal Housing Administration (FHA)14
History of the FHA14
The current FHA15
The FHA Down Payment16
The Mortgage Insurance17
Stopping the FHA Mortgage Insurance18
The...
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