A letter to the editor in the Wall Street Journal - Essay Example

Letter to the editor s COVER PAGE Topic: The payment of Mortgages before credit cards. Angle: Due to the previous loss in home values consumers have been making credit card payments ahead of Mortgages which is an unusual event in the United States. But due to a constant rise in home values, the normal methods of payments are returning.Purpose and Thesis: I agree that mortgage payments should be made ahead of the credit card payments because this is what is expected by the lenders.Reader and Audience profile: My main audience will be my professor and classmates.

Context: The payment of credit cards before mortgages is not a common way and had been in effect due to a previous decline in home values, this made the consumers prioritize the payment of credit cards.Summarize and Paraphrase: The payment of credit cards ahead of mortgages is due to the fact that skipping on credit card payments will bring a quick reaction and a loss of key liquidity source.Quoted Material: The links between home prices and making payments is amazing.Letter to the editorToThe editor,The Wall Street JournalDear Sir/Madam Following an article posted on the wall street journal on how consumers were back making mortgage payments ahead of credit cards, I would like to bring to your attention my support and satisfaction towards the article and the author because I felt that it highlighted the reasons for that payment trend and was straight to the point.

The payment of Mortgages before the credit card has been the normal way and has been in effect for a very long period of time, this is exactly what lenders expect from consumers.New information from TransUnion, which is a firm that deals with reporting credit related information, supports this stand that normal payment methods were back to effect at the end of the year 2013 due to a rise experienced in home values. The main findings from the research carried out shows strong links between the value of homes and payment behaviors.

Further supporting this case is the findings that were published from all the fifty states in the United States which clearly point out that a decline in home values together with high unemployment rates saw borrowers skip mortgage payments but still make payments on their credit cards. There is an example of Nevada, between the years 2006-2009, where the value of houses went down by 57%. Borrowers were seen to skip making mortgage payments while staying true to credit card payments. It’s clear that people would be more willing to default on mortgage payments because foreclosure is not really an immediate problem.

it involves a long process which takes months if not years. Credit card payments on the other hand would be hard to miss, by doing so the reaction would be immediate. Banks should therefore continue to ease standards on mortgages to the payments of mortgages ahead of credit cards. ReferencesNick Trimaros (2014): “Consumers are back paying mortgages ahead of credit cards” Retrieved from http://blogs.wsj.com/economics/2014/05/27/consumers-are-back-to-paying-mortgages-ahead-of-credit-cards/ on 2014 Web.

28 May 2014.