Posted on 01/30/2008 3:45:42 PM PST by Lorianne
Edited on 01/30/2008 3:49:56 PM PST by Admin Moderator. [history]
What could be worse than getting behind on mortgage payments? Owing your lender more than your home is worth.
That's what's happening to homeowners across the country, many of whom just a couple of years ago opted for interest-only or adjustable-rate mortgages. For them, just as their loans reset and interest rates rose, home values began to plummet, leaving them with negative equity; this is where their mortgage is greater than the value of their home.
Of course, some homeowners started off walking a shakier tightrope than others. Many subprime borrowers acquired piggyback mortgages, where a second mortgage covered the downpayment, leaving them with negative equity from the beginning. Indeed, 79% more U.S. homes entered foreclosure last year than in 2006, according to data from RealtyTrac, an Irvine, Calif.-based real estate research firm. Congress's Joint Economic Committee estimates that 2 million Americans will lose their home over the next two years, a figure in line with most research firms and rating agencies.
If you put 50,000 in the market and it goes up 10% you make 5,000. If you put 50,000 into a 500,000 home and it goes up 10% you make 50,000.
RE is a good longterm investment for many people. With the rent and tax deductions creating a positive cash flow it's a double pay off.
We are financial planner. You have to proceed with caution. One paragraph from some guy or gal on the net does not constitute good advice. There are many variables and it should fit your situation.
Talk to someone you trust who can show you their success or that of their clients.
I guess this is where being older is an advantage. This happened during the early 80’s. They also had interest rates for mortgages at about 15% believe it or not. With negative equity, people couldn’t remortgage even when rates came down. I knew a lot of crying people.
My mortgage was only 13% and I was happy, believe me.
PS. In refinancing your home you may increase your tax deduction and possibly get a lower rate.
Cars depreciate because they decline in value as they wear. Some have better resale value than others.
Properties typically retain a much higher residual value because of the real estate they are on, not the structure on the real estate.
The real reason housing prices are declining is not depreciation but market economics. There are more houses for sale to fewer buyers.
Get ready here comes the sob story of the new homeless just in time for an election. In fact they are not losing their homes, they are relinquishing property with their name on the title and moving to a rental unit somewhere else.
The presence of cops deters crime, and the firefighters are putting out fires before they reach your house. So even if you don't have direct contact with them, you benefit from their efforts.
I’ve no use for schools and parks.
Your community has use for workers who can read, and children who aren't playing in the street. You benefit from a livable community, whether you directly make use of the facility or not. I have never been hospitalized and don't attend church, but I'm glad my neighborhood has churches and hospitals.
That leaves roads.
Which also benefit folks who don't drive. Even if you always walk to the store, the roads allow the stuff to be there for you to buy.
I’d say I’m paying too much.
That's something to take up with your local authorities. They do answer to you. But not to you alone -- and if your argument is that taxes should be cut by eliminating schools, parks, cops and firefighters, don't be surprised when folks don't rally around your message.
Tijeras, may I ask where you found that information about Albuquerque’s foreclosure rate?
You would gross $5K on the $50K infusion, and would gross $55K total.
They throw in the closing costs into the mortgage. So they owe more than the sales price of the house. Also if you sell, there are taxes to pay and if you use an agent theres another 3 to 6% of the cost.
I bought mine in 1981 for $90,000. I can sell it for ~$375,000 right now. In fact, if I drove a bulldozer though the front door I could probably get the same amount of money. I’m in the southwest Chicago suburbs near the intersection of two expressways and about a 5-iron from a forest preserve.
They don't need to. They can just decide on their own what they think it's worth, give you the money, and have the cops throw you out without having to go through all that messy "free market" business. Google "Kelo vs. City of New London" for more information.
Thank you!
Uh, of course they cannot. and I never said they could, if you make your payments (your lease).
I posted that we are not truly owners, we are leasing. For proof, just try NOT paying your property taxes. If you do not, they CAN take your home. Therefore, we are just leasing our homes and property. We are not truly owners, like the Freemen were in old England.
Thank you!
I live in michigan and am a hard core conservative...as is most of the people in my area...its just too bad that our vote doesn’t count considering the rest of the state votes dem.
Most of the forclosure issues here are directly related to the loss of jobs. There are no new jobs and people are just moving out of state. I remember this same thing happening in the early 80’s. It’ll turn around and in the meantime the only ones who will hold on are the ones with secure jobs...people who work for the government basically.
Keep your fingers crossed for me. I hope to have mine paid off by this July 3rd.
And my property taxes really aren't that bad ('cept in principle!).
Most excellent! Congratulations! :-)
Because the loans persist against the borrower even after foreclosure and because the borrower must pay taxes on the income that he supposedly receives in any foreclosure (the value of the loan), most foreclosed borrowers cannot afford any rental accommodations or even rights to a bed at a homeless shelter for several years. Expect millions of Americans, especially women and children, to perish of starvation and exposure under the crushing financial burden of taxation and debt. You can examine the dangerously unhealthy waistlines of deeply impoverished Americans to appreciate the severity of the malnutrition that these compatriots already experience. And most Americans long mired in poverty occupied rental accommodations because the discriminatory banks arbitrarily denied their applications for subprime loans based on their substandard welfare checks.
It was mentioned on the morning show on KOB.
...And most Americans long mired in poverty occupied rental accommodations because the discriminatory banks arbitrarily denied their applications for subprime loans based on their substandard welfare checks.
You've got to be kidding me. Are you trying to paraphrase Das Kapital?
I’m sorry, I don’t understand.
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