Funny thing about that question is that the answer is the same as ‘why the down swing in the housing market has not effected our economy more’.
The great part of the foreclosure delima is that the financial burden is primarily on the lender.
We are truly thankful to all the lenders that are willing to work with people experiencing foreclosures AND lets also remember that it cost roughly $25,000 to foreclose on a home. Those costs include attorney fees, recording fees, lost revenue because of no payments both during the foreclosure process and until the home is sold (homes are currently averaging 7+ months before a sale in most areas), realtor fees to sell the property once acquired, costs to fix any needed repairs, discounting the property at least 10% for a quick sale and possibly having to shoulder the burden of a depreciating house.
So what does this really mean?
Many people have taken out 100 percent mortgages that are equal to or slightly less than than the actual value of their home. Now many areas are experiencing depreciation, so maybe a home could be selling for 10% or less than what is would have one year ago. Now add in higher interest rates, more homes in the inventory, longer selling periods and it has now become more of a problem for the mortgage lender.
Come on, does anyone think that they really want your home? Do you think that all the aforementioned facts equal “lender kindness”, NO! Its a business to them (And thats OK).
Mortgage lenders are trying not to lose money.
This is the reason the housing market has had so little effect on our economy.
The majority of financial losses, statistically for the most part, are on the mortgage lenders with deep pockets. Banks have recorded record profits over the last few years because they make a tremendous amount of money off of the interest we pay. They are more ‘suited’ to absorb the losses.
Remember the Great Depression, OK, me neither BUT I do know that banks were able to take a home from a person whenever they wanted (This is called – Calling A Note) AND they did just that. Homeowners lost everything that they had and everything that they soaked into their home and land. People had put all their life savings into building their homes and remember the times were different.
The end result was that the homeowner experienced the financial losses. Actually, this is when and why many of our current mortgage laws have evolved.
So if you or someone you know is currently in foreclosure, this is a substantial part of the argument made to a lender as to why ‘you should get another chance’. The will loose a but load of money if they foreclose on your home, especially if you are in a depreciating neighborhood.
If you are not comfortable or if you have been unsuccessful in making the argument to the lender BUT you can now document that you have resolved the hardship and you can NOW afford all your bills; there are people you can trust.
We recommend Jim Richman. He is a retired US Dept of Housing and Urban Development Commissioner, retired mayor of Burbank California and he has a great reputation. He will not take your case until he completes a free consultation and if he determines that you will qualify, only then will you will be accepted into the program.
If anyone needs such assistance, give his company a call at 1-877-220-2207.
Tags: 100 percent mortgage, Foreclosure Market, Housing And Urban Development, Lenders With Problems 2007
