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Sarasota Foreclosures - Who's Getting $1,000s Knocked Off His Mortgage?
Are you eligible to have $1,000s (maybe TENS of $1
,000s) knocked off your mortgage?In record numbers, mortgage debt owners are foreclosing on homeowners.
Now, more and more property owners are strategically defaulting - that is, they're saying to hell with paying on a property worth 30-50% LESS than what they owe.
These property owners have decided to stop the bleeding. In their minds, Sarasota real estate will not break even for years...many years.
Heres the reality: many homeowners strategically are walking away from underwater homes. In Florida, it's estimated 3 out 4 homeowners with a mortgage owe more than their houses are worth. Whether or not you approve of strategic defaults (or walkaways) is not the question.
Sarasota real estate is going down. Properties are selling (and that's great and newsworthy).
What they're not telling you is that Sarasota foreclosures continue trending DOWN in median price.
Attempts to REDUCE foreclosures are not working. All these alphabet soup programs are not working.
And now Bank of America steps forward with principal reductions.
PRINCIPAL REDUCTIONS.
You'd better believe principal reductions are thunder in a bottle. Love the idea or hate the idea; it doesn't matter.
Reductions have been taking place for 2 years. You simply didn't hear about it for obvious reasons.
1. You are underwater but current on your mortgage - YOU want a principal reduction.
2. You owe your house free and clear, have lost serious value BUT you hate principal reductions.
Nonetheless, the Federal Deposit Insurance Corp. is developing a program to test whether cutting the mortgage balances of distressed borrowers who owe significantly more than their homes are worth is an effective method for saving homeowners from foreclosure.
The program would be aimed at a growing population of homeowners who are underwater on their loans, estimated at more than 20 percent of borrowers, or 11 million homeowners. Economists consider these borrowers among the most vulnerable to foreclosure, and some industry officials worry that more of them will simply walk away from their mortgages, or strategically default, rather than spend a decade or more trying to regain positive equity.
Home Affordable Mortgage Program (known as HAMP) is not working.
Too slow. Too ineffective. Borrowers do not benefit much from these mods dropping the rate to 2%, RE-amortizing the mortgage to 40 years still makes most of these homes too expensive. It does little for the ability of the underwater borrower to carry the property.
And these HAMPs fall into default at a very high rate 60-80%, depending upon circumstances.
Lenders have been reluctant to cut the principal balance owed by distressed borrowers, arguing that it would encourage homeowners to become delinquent even if they can afford their mortgage. The foreclosure crisis is not going away.
Regardless of the program, some will like and benefit; others will hate and not benefit. For many people, principal reductions are not fair. In what shape will this principal reduction occur? Who qualifies? Will a bunch more people jump in? How will the IRS treat forgiven debt?
How do you feel about principal reductions? Even if you are NOT eligible to get $1,000s (or more) cut from your mortgage, would you? How far will you go to cut your mortgage debt as prices have dropped to 2002 prices. Go now to my blog at sarasotahomesforsalenow.com & tell me what you think. Of course, whatever you and I think means little. Please contact me now if you want to buy or sell a house in or around Sarasota. I want to help you.
by: Mike Payne