Should I Consider Foreclosure
Every homeowner struggling with their payments is making the decision of maintaining increased payments or face foreclosure. The latter has a high risk of derogatory credit and foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go” or should I refi my home?
The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. World markets are in chaos, we are all finding it increasingly difficult to make the payments, and they have run out of options. When the bank threatens with foreclose several families are just walking away leaving the house to be taken. Is this the right option?
I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.I can understand that you may look at that as a traditional frame of mind, but it’s a fact of our present situation.It was a shock to some to see national home value increase seven percent a year though the nineties. Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Do you have a heart beat?What is your credit rating? Obviously you can afford a house.With that in mind you might be able to say stated income and teaser loans were common, due to a housing prices from the mid 90’s.Now we see the exposure with home values increasing too fast and people tapping equity to purchase luxury items. Most of us took money from our homes to purchase the things we could not normally afford, and this began a cycle of refinancing for the new toy everyone wanted that year.
Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.You might be thinking that you could just walk away from the house and possibly buy it back. This is all true you can walk, you could buy your home for less, but do you really want to?Responsibility lies in the agreement borrowers sign at closing, the media frenzy is only encouraging people to walk away from there obligations. Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.I hope your reading this article right now with a renewed sense of hope; it is everyone’s responsibility to pull up their boot straps and save our economy and you can start with your mortgage.
Tags: appraisal, Homes, Loan, market, mortgage, payments, property, refi, refinance, upside down, values
Bitter Much? While I agree, many DID take out loans they can’t afford…Some of us had to move because of a job transfer and now we are stuck with a house that we can’t sell (BEAUTIFUL house, all the upgrades, in the 200k range but we are listing for less).
We have to have a place to live where the new job is…but we cannot sell the GA house. not one offer in 2 years. and its not looking good. we have come down in price from what its worth…about 40k. The bank won’t TAKE anything less than this. WE compete against foreclosures. CRAPPY, ill kept foreclosures.
What are we to do? We bought this house to live in for many many years. This wasn’t a Second home, or an investment. we have a 30 year fixed…but its still high. Do we refi until we can sell?
Just so you know, not EVERYONE took advantage of the system…some of us are honest and doing the best we can.Taking on 2 jobs, no cable, no perks and more…
Comment by Bunches McGuinty — April 12, 2009 @ 6:15 pm