1. Alicia Plese

    Hello there just came upon your blog from Google after I typed in, “ARE WE SCARING FOLKS BY TELLING THEM THEIR MORTGAGE IS U NDER WATER?” or something similar (can’t quite remember exactly). Anyways, I’m delighted I found it because your subject material is exactly what I’m looking for (writing a university paper) and I hope you don’t mind if I collect some material from here and I will of course credit you as the source. Thanks for your time.

  2. Mike

    It really has nothing to do with affordability of paying for it. It is the fact that a homeowner with negative equity has no buying power. The homeowner will not be able to acquire lower interest rates (refi), or other options in order to lower his/her interest payments. That is unfair, since the homeowner didn’t “personally” get themselves underwater in the first place. It is a result of those “neighbors” who foreclosed their properties, walked away, and de-valued the homeowners property, sometimes by significant percentages. In the long run, the homeowner will eventually lose money, if they keep paying for basically a “dead horse”, that they won’t live long enough to eventually turn it over. That’s the problem, and how it becomes a hardship. You can’t sell something that is over 100% of it’s value. If houses in my area have a market value of $70,000, and I owe $100,000 on my mortgage, there is no way I can sell. That’s the hardship. If the banks would actually use the various programs for the individuals they were initiated for, underwater mortgages, and not those who had defaulted, the housing problem wouldn’t be that bad, but it is leaving those who are underwater the consideration of walking away. The penalties are minor compared to those people who are now burdened with paying for an underwater mortgage since their not-so-good neighbors packed up and left high and dry. Nobody, not the Feds, the bankers, lenders, servicers etc., seem to get this point. None see the trend and pictures. They’re all gangsters and crooks. A mortgage in America is criminal, and the suckers who get swept into it, are dumb—including me. It is not an investment of any kind; it is a contract and only a contract.

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