Many homeowners are facing sacrifices in order to make mortgage payments on their homes which have 0 or less equity. Most people would agree that at least 10% of households do not have the same income they had just 3 years ago. Additionally it is estimated that 15 million homeowners owe more than their home is worth.
While being “underwater” on your home may not spell disaster for some, many face very difficult choices daily in order to pay their mortgage. So who can blame parents for moving into an affordable apartment or combining households in order provide necessities for their children?
I can site case after case of these responsible families trying to sell their property so they could get out from under the mortgage. The plan is to get into a home that is less expensive so they can live within their means. So they listed their property, attempted to work out short sale arrangements with the bank, and competed with the other responsible families to market and sell their homes. In nearly every case they held on as long as they could, many attempted short sales while others just finally threw up their hands and walked away. This “responsible” household is now reported as a foreclosure statistic.
With a declining market, high unemployment and a poor economy measures need to be implemented in order to prevent more Americans from finding themselves in a similar situation. It was reported last week that the HAMP (Home Affordable Modification program) participants is on the rise and growing. We need to improve and expand this program. Let’s make a real effort to help our fellow Americans and ease up on any new regulations that may have unintended consequences. While this program may only provide payment reduction and no mortgage balance reduction, as the rate of foreclosure declines property values will increase.
