Recall the Application About the Number of Homeowners in the Year

question 141

Multiple Choice

Recall the Application about the number of homeowners in the year 2012 who owed more on their homes than their homes were worth to answer the following question(s) . To assist homeowners who are behind on their payments and may eventually lose their homes to foreclosure, many in Congress have advocated for reduction on the amount of money they actually owe-or principal reduction. The hope is that with a reduction in the amount they owed they would start making timely payments on their mortgages and avoid a messy default.
-Recall the Application. Assume that immediately before the housing bubble burst, you purchased a $250,000 home and took out a $225,000 mortgage to make the purchase. When the bubble burst, the value of your home fell by 20 percent. If you immediately sold the home for its new, current value, you will still owe the mortgage company an additional ________ and your total loss incurred from this entire process will be ________.

• A) $50,000; $75,000
• B) $25,000; $50,000
• C) $18,000; $25,000
• D) $50,000; $25,000

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Definitions:

K-12 School Year

The educational period or academic years that include kindergarten through 12th grade in many countries, marking the compulsory stages of schooling.

Resources Are Scarce

The economic principle that the amounts of natural resources, goods, and services available are limited in relation to the desires and needs of people.

Households

The basic economic unit of a society, typically consisting of people living together in the same dwelling.

Societies

Groups of individuals who share a common culture, institutions, or identity, often living together within a defined geographical area.