Are You in an Upside-Down Mortgage?
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By :
William Dorich
Submitted:
2009-05-22 05:36:08 Number of Times Read: 17 |
As a Realtor for more than 15 years, last summer I was a guest at a dinner party in which I announced "that the 150 foreclosures per day in Los Angeles were about to rise to four times that level." My surprised dinner partners accused me of having one-too-many during the cocktail hour, but I was stone sober and most of the other successful business guests thought my doom and gloom remarks were intended to get them to list their property with me. They were smug with their success and their fancy high-rise million dollar condos to realize I was giving them sound warning of things to come, even in affluent Beverly Hills.
I live in one of the expensive zip codes in Los Angeles and when I look over my daily foreclosure list it is shocking that I am surrounded by dozens of foreclosures and properties with major tax liens in some of the most luxurious property in Southern California. The mortgage meltdown was believed to only affect the financial inept and irresponsible home buyers. But this crisis is proving to be an equal opportunity destroyer of lives, families and personal wealth. No one is immune to bad business investments and poor judgment, or worse, mortgage schemes.
Equally abhorrent is how fast our government came up with $350 billion to rescue Wall Street and the banks but not $50 billion to save strapped homeowners who suffer from this crisis in equal proportion.
If you are in an Upside-Down Mortgage in which you now owe far more than the property is worth then walk away! Yes, you read me right. If your lender or Loss Mitigation department will not honestly negotiate a modification or a workable resolution to your problem mortgage, walk away!
We read in the newspapers that lenders do not want your property because it costs them an average of $60,000 to dispose of an empty house. What they do not tell you is that most of those houses have been stripped of their sinks, bathtubs, toilets and anything that can be removed and sold from the structure. The really ugly aspect of any foreclosure transaction is that the unsuspecting buyer at a foreclosed sale may be unaware of the condition of the inside of these houses the day before the auction and is left to rebuild the property at their expense. The foreclosed deal turns out to be a financial albatross to the new owner that can be financially pushed over the cliff as the next victim of yet another foreclosure in the near future.
Too many shortsighted lenders threaten homeowners and pretend they win in foreclosure but it usually costs them more to foreclose then to negotiate a reasonable reduction in the balance of your mortgage. Therefore, instead of begging and pleading you might consider threatening to walk away, it might bring about honest negotiating in today's crisis.
If your interest rate is going to continue to escalate through the roof, walk away! If your financial circumstances are going to be further complicated with late fees, and various penalties, then walk away. Irresponsible advice? Maybe. Survival for you and your family perhaps.
The next financial crisis is going to be the credit card debt and lenders are already raising rates to 29 percent, a violation of the usury laws that Congress has ignored for decades. They are giving these banks tens of billions of dollars and the banks are nailing their cardholders with absurd interest rates. This will not stimulate the economy but drag in down into the cesspool of more greed. The House and Senate have finally taken the credit card industry and turn it a bit on his head, maybe now we will all have a fighting chance, especially those of us who pay our bills on time.
When your mortgage payment is due on the first of the month you have 15 days before it is considered late and reported against your credit score. But dare to be one day late on a credit card payment and they nail you to the wall.
American taxpayers need to hold our Congress and Senate responsible and insist that they start to uphold consumer laws already on the books that protect the consumers instead of giving lip service to the hoodlums in corporate America who continue to charge illegal "usury rates" by moving their credit card operations to states that permit this criminal activity which is sucking the very life blood out of this economy. Its time Americans start fighting back. |
Author Resource:
William Dorich is author of 7 books. His two newest are: Defeat Foreclosure and The Nursing Home Crisis. See: http:// www.defeatforeclosure.org
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