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FHA loans are common among first-time homebuyers, because they have looser restrictions, more relaxed guidelines, and can provide an easier time getting approved for a mortgage. However, they may also lead to more home buyers spending too much on their first home, as these loans allow you to allocate more of your income to the mortgage payment, which can quickly become a problem if you lose your job or your home loses its value. Studies have shown that in some cities, homes with federally insured mortgages are more likely to be foreclosed on. So what can banks do to avoid this problem in the first place, or protect those homes that become uninhabited?

Change Loan Practices

While standard mortgages require a down payment of 20 percent of the home’s price, FHA loans typically only require 3.5 percent. However, some say that these loans make it too easy for homebuyers with poor credit scored or too high of a debt-to-income ratio to purchase a home with a loan. One way for banks to stop homes from going into foreclosure and the loans from going delinquent is to tighten up the requirements for loan approval. This will help ensure that people don’t fall behind on loans they couldn’t afford in the first place.

Employ Frontline Protection Measures

Another way that banks can protect vacant properties while attempting to resell them is by installing door guards and window guards to keep uninvited “guests” out of the homes. When people can break into the home, they may vandalize or damage the property, which can cause more delays on getting the home back on the market. The longer a home sits vacant, the more likelihood there is that someone will attempt to break in. It’s important to keep up with the surrounding area—mow the lawn, etc.—but it’s even more important to install window guards and door guards so that would-be criminals and vandals can’t break in and cause havoc.

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