The Foreclosure Crisis Continues

I have not been here for a while, but as I was flicking through the channels this morning our local CBS affiliate WKMG had this program on called Flashpoint. I saw this and thought it would be interesting to share. It is about the foreclosure crises and how borrowers are being fooled into thinking that the banks have their interest at heart. Click here to view.

Short Sale And Walk Away

The New York Times today reports that the Obama Administration is looking into a new program which would take effect on April 5, that would allow homeowners to sell their home as a Short Sale and mandate the banks to forgive the difference on the debt owed.

With the new program the bank servicing the loan would get $1,000. If there is a second loan $1,000 will go to the bank carrying the second mortgage; and the distressed homeowner would then get $1,500 for relocation assistance.

Among the benefits highlighted in the program is the peace of mind many homeowners facing foreclosure would have from knowing that they will not be tracked down and sued for the remainder of the loan, as well as minimizing the damage a foreclosure would have on their credit.

Paddle or Swim for Shore?

So in my last blog, I spoke about the often agonizing decision homeowners are faced with in this down real estate market, and the dilemma of walking away from their homes. Good Morning America featured a revealing segment on the subject this morning February 11, 2010. Please click on the link below and watch.




I am not advocating this, but I think it's worthwhile sharing and to get your viewpoints on this.

Let's hear them!

Should I Stay or Should I Go?

Many borrowers are faced with the dilemma of whether to stay in their homes or walk away due to the fact that their homes are "under water" - a term used when a home is worth less that the mortgage on the home.

At first, I was wondering why would someone with a job, and having the ability to make his/her payments do such a thing knowing the consequences:
(i) a ruined credit rating; (ii) the foreclosure stays on your credit for seven years; and (iii) higher interest rates on purchases such as car insurance, etc.

Unfortunately, mortgage holders, banks in particular have not been forthcoming with loan modifications despite a national outcry regarding the urgent necessity to assist homeowners caught in this unfortunate situation. Without the ability to modify, a large number of homeowners are now seeing voluntary default as a viable option. Their hope is that by renting for a period, they can save enough money to put them in a better position to purchase when the market rebounds.