Housing Crisis Gets Personal
Are you one of the hundreds of thousands of Americans who received a Notice of Default last month
? Well then, now this housing crisis is personal.
If you are one of the almost 100,000 Californians who received a Notice of Default in the past month, you are dealing with some strong emotions like fear, embarrassment, frustration, despair, and anger. Not nice! These can do a ton of damage to their life - OR, they can propel you into action to defend yourself, protect their family and save their home!
This predicament is not for lighweights. It's for tough people who are ready to take action to protect themselves and do what is right.
Never in history has so much wealth "evaporated" as rapidly as in this U.S. housing market meltdown. It's a global problem as mortgage-backed securities and derivatives are traded on stock exchanges worldwide. Approximately 15 million Americans purchased homes at the height of the housing bubble (from 2004-2006)an estimated three million of those in CA. Today they (read "YOU") find themselves at "Ground Zero" in the housing crisis. It is likely that more than 8 million homes, 16% of total will go into foreclosure between 2009 and 2012.
And, as bad as it is now, it's likely to get worse before it gets better. More numerous than the sub-prime loans that started the decline, thousands of Alt-A Option ARMs are resetting to higher payments and it is now estimated that more than half of these will fail and require some type of workout such as foreclosure, short sale, deed-in-lieu or settlement. Current modification initiative, including President Obama's Making Homes Affordable Program, is only a stop-gap measure, meant to stem the rising tide of foreclosures. It does nothing to address the actual problem of lost value. That pricey problem is still "out there". Recently announced efforts to offer principal reductions, from banks, government and private "hard-money" lenders, are still just talk.
Nationwide the numbers are bad - nearly 20% of homeowners are underwater on their home mortgages. And, although that sound terrible, the problem is many times worse in states like CA, NV, AZ, FL and MI where rates exceed 50% in many metro areas. This bubble-deflating work will take us many years to work through.
The numbers are shocking, aren't they?And the problem is personal to tens of millions of us. We are struggling with a personal financial crisis in need of a bailout. This is personal.
Dealing with it means the following: 1) Understand all foreclosure workout options, 2) Asses your resources, 3) Asses your legal vulnerabilities - can the lender hold you liable for any "shortfall"do they have "recourse"? 5) Assess your tax consequences, 6) Understand your housing options - rent vs. own and 7) Think thru the credit score issues and make peace with them.
Many organization are offering serious help for homeowners. But, it's still up to you. Up to you to shake off the shock of it all and swing into action. You need street-smart advice, not flowery fluff or the same old line.
by: T.J. Rockwood, Jr..
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