Link to article: http://bankruptcy.findlaw.com/bankruptcy/is-bankruptcy-right/bankruptcy-foreclosure-help.html
Many Americans fall behind on their mortgage payments. Some lenders and mortgage companies may be willing to work out deals with the homeowners, such as a short sale or loan modification. Most lenders are not. In that case, the lender will most likely begin the foreclosure process, as set out in the mortgage contract. The foreclosure process involves the creditor repossessing and usually selling the house at a public auction. The proceeds from that auction are used to repay the mortgage and any legal costs.
The foreclosure process takes time. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. This gives the homeowner some time to consider alternatives to foreclosure, such as a loan forbearance, short sale, or deed in lieu of foreclosure. Should all of these alternatives fail, bankruptcy may help in several different ways.
How to Delay Foreclosure with an Automatic Stay:
Bankruptcy and foreclosure are both words that the average person dreads hearing. If you are facing foreclosure, however, bankruptcy can become a tool to help you keep your house.
Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an "automatic stay", that directs your creditors to immediately cease their collection attempts, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.
There are two exceptions to this buying time rule:
If the Lender Files a Motion to Lift the Stay: Unfortunately, the lender can file a motion to lift the stay, which asks permission from the bankruptcy court to continue with the foreclosure sale. If this is granted, you may not receive the extra three to four months of time. However, bankruptcy normally still postpones the sale by about two months or more, or even longer if the lender does not act fast in filing the motion to lift the stay.
If the Foreclosure Notice has Already Been Filed: Most states have laws that require lenders to give homeowners a certain amount of notice before selling their property. A bankruptcy's automatic stay will NOT stop the clock on this advance notice. For instance, California law requires a lender to give the homeowner at least three months notice before selling the home. If a California resident receives this three month notice, and then files for bankruptcy two months later, the three month period would have passed after being in bankruptcy for only one month. As a result, the lender could file a motion to lift the stay and ask the court's permission to schedule the foreclosure.
How to Use Chapter 13 Bankruptcy to Help You:
What Chapter 13 Means for Bankruptcy and Foreclosure: Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments, or "arrearage". You can propose the length of time for repayment, but keep in mind that you'll need sufficient income to pay BOTH your past due payments AND your current mortgage payments at the same time. So long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.
2nd and 3rd Mortgage Payments: Chapter 13 can also help eliminate payments on second or third mortgages. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Under Chapter 13, unsecured debt takes last priority and usually does not have to be paid back. This recategorizing process is possible if your first mortgage is secured by the entire value of your home since this means that there is no remaining equity in your home to secure the second and third mortgages.
How to Use Chapter 7 Bankruptcy to Help You:
Chapter 7 bankruptcy also cancels all the debt secured by the home, including mortgages and home equity loans. Furthermore, Chapter 7 goes a step further. Thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner's default. This tax law applies to the 2007, 2008, and 2009 tax years. However, the new tax law does NOT cancel the homeowner's tax liability for the lender's losses at foreclosure if:
* The loan is not a mortgage or was not used for home improvements (like a loan used to pay for a vacation or automobile). The mortgage or home equity loan is secured by property other than your principal residence (like a vacation home or rental property).
Cautionary Notes about Chapter 7:
You Could Still Lose Your Home : All of this debt and tax liability forgiveness is great, but note that Chapter 7 will not keep you from losing your home. Chapter 7 forgives your debt, and that is all it does. When you enter into a mortgage, you are agreeing to use your home as a type of collateral in case you default on your payments. Chapter 13 enables you to pause action on that lien, while you catch up on your payments; hence, you may save your home. Chapter 7 forgives your debt, but it will not lift the lien, and hence will not lift the foreclosure on your home. Therefore, you will probably still lose your home.
You Could Lose Other Valuables: Because the courts typically want to make the creditors whole again from their loss, the bankruptcy trustee may award money from the sale of certain other valuables of yours to the creditors. For example, if you have a valuable wedding ring that's value exceeds the dollar amount you are allowed to keep during bankruptcy, under the "jewelry exemption", you could lose your wedding ring.
You May Not Be Eligible: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that anyone whose average gross income for the six-month period before the bankruptcy filing exceeds the state median income for the same sized household is ineligible for Chapter 7 bankruptcy. Additionally, if your income is sufficient enough for you to pay your living expenses AND fund a reasonable Chapter 13 repayment plan, you are also ineligible for Chapter 7.
How Bankruptcy Will Affect Your Credit:
Although bankruptcy and foreclosure are both extremely damaging to your credit, sometimes filing bankruptcy can be a wise choice when trying to rebuild credit. A foreclosure not only damages your credit score for years, but you are still left with the mortgage debt. Most mortgage creditors will not consider you for future mortgages if you have a foreclosure on your credit history. In contrast, bankruptcy lets you start fresh. It still is damages to your credit, but because you are debt free, you immediately begin rebuilding good credit sooner.
Although bankruptcy has a few negative consequences, and may not save you from losing your home, it can be the best option in starting fresh with no debt, getting back on your feet, and saving money.
Worst Case Scenario: Losing the House, but Also the Debt
Sometimes bankruptcy can't prevent the loss of your home, so you may start to think that a bankruptcy filing is pointless. There are other benefits to filing for bankruptcy besides the interplay between bankruptcy and foreclosure, however.
Even if you can't keep your home, bankruptcy can help to shovel out from under mortgage debts and tax liability. This is an important first step towards getting back on your feet. Bankruptcy can also help you to put away money for the tough times ahead.
This blog is updated by the San Diego Bankruptcy Law Firm. The blog is designed to illuminate, update and educate consumers about their bankruptcy rights. Our staff of Bankruptcy Attorneys help consumers file for bankruptcy protection under Chapter 7 and 13 of the Bankruptcy Code. Feel free to contact our Bankruptcy Lawyers for a free consultation at 619-260-1800 or visit us at www.gobksandiego.com
Showing posts with label chapter 7. Show all posts
Showing posts with label chapter 7. Show all posts
Monday, October 3, 2011
Wednesday, September 21, 2011
Medical Bills, Debt Sends Many into Bankruptcy
By Cynthia Hsu on August 31, 2011 8:46 AM
Link to article: http://blogs.findlaw.com/law_and_life/2011/08/medical-bills-debt-sends-many-into-bankruptcy.html#more
What would you do if you were saddled with high medical bill debt? Would you declare bankruptcy? With the rising cost of healthcare, it seems that high medical bills and bankruptcy are starting to go hand-in-hand.
About 20% of Americans cite medical bills as the reason behind their bankruptcy when they seek financial consulting, according to a recent study by CredAbility.
This is an increase from just a few years ago, when about 12-13% of Americans cited medical debt as the reason behind their bankruptcy, according to The New York Times.
Why? With the rough economy, more Americans have gone through periods of unemployment, leaving gaps in their medical insurance coverage.
Plus, Americans who purchase insurance themselves might opt for cheaper plans with lower premiums in an effort to save money.
Lower premiums, however, often mean that there are high deductibles, making consumers more vulnerable to incurring high costs before their insurance kicks in, The New York Times reports.
It also seems medical debt is simply the kind of debt that Americans feel obligated to pay off. Some might even turn to opening up a new credit card, according to The New York Times.
This, unfortunately, may only lead to more debt.
Is bankruptcy right for consumers who are weighed down by medical bill debts?
It could be, but consumers should do their due diligence and carefully research their options before considering bankruptcy. There are alternatives, such as debt management plans that allow credit card holders to pay off their debt over a set period, reports The New York Times.
And, consumers looking to erase their medical bill debt through bankruptcy will need to figure out which bankruptcy is right for them. Is it Chapter 7, which erases many debts but may liquidate a consumer's assets? Or Chapter 13? Consulting an attorney to discuss your medical bills and bankruptcy might be a prudent option, as bankruptcy law is complicated and can be difficult to navigate without some expert guidance.
Link to article: http://blogs.findlaw.com/law_and_life/2011/08/medical-bills-debt-sends-many-into-bankruptcy.html#more
What would you do if you were saddled with high medical bill debt? Would you declare bankruptcy? With the rising cost of healthcare, it seems that high medical bills and bankruptcy are starting to go hand-in-hand.
About 20% of Americans cite medical bills as the reason behind their bankruptcy when they seek financial consulting, according to a recent study by CredAbility.
This is an increase from just a few years ago, when about 12-13% of Americans cited medical debt as the reason behind their bankruptcy, according to The New York Times.
Why? With the rough economy, more Americans have gone through periods of unemployment, leaving gaps in their medical insurance coverage.
Plus, Americans who purchase insurance themselves might opt for cheaper plans with lower premiums in an effort to save money.
Lower premiums, however, often mean that there are high deductibles, making consumers more vulnerable to incurring high costs before their insurance kicks in, The New York Times reports.
It also seems medical debt is simply the kind of debt that Americans feel obligated to pay off. Some might even turn to opening up a new credit card, according to The New York Times.
This, unfortunately, may only lead to more debt.
Is bankruptcy right for consumers who are weighed down by medical bill debts?
It could be, but consumers should do their due diligence and carefully research their options before considering bankruptcy. There are alternatives, such as debt management plans that allow credit card holders to pay off their debt over a set period, reports The New York Times.
And, consumers looking to erase their medical bill debt through bankruptcy will need to figure out which bankruptcy is right for them. Is it Chapter 7, which erases many debts but may liquidate a consumer's assets? Or Chapter 13? Consulting an attorney to discuss your medical bills and bankruptcy might be a prudent option, as bankruptcy law is complicated and can be difficult to navigate without some expert guidance.
Tuesday, September 20, 2011
If you are facing foreclosure, San Diego Bankruptcy Law Firm can help protect your home.
It is common for people to fall behind on their mortgage payments. If you find yourself in this position, there are ways you can find relief.
Filing for bankruptcy can delay foreclosure.
When a person files for Chapter 13 or Chapter 7 bankruptcy, they usually receive immediate protection from creditors through a special court order known as an “automatic stay”. This means creditors must immediately stop their collection attempts.
If a foreclosure sale has been scheduled for your home, it will be postponed until the bankruptcy is finalized. Sometimes there are exceptions to this rule, so it is important to contact San Diego Bankruptcy Law Firm so we may discuss all of your options. Your initial consultation is free.
Filing for Chapter 13 bankruptcy can help you avoid foreclosure and keep you in your home. Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments.
A short sale can stop foreclosure.
It is important to remember a short sale can stop foreclosure, but it also has serious tax and credit consequences. In addition, some lenders and mortgage companies will refuse to do a short sale. Filing for bankruptcy can help you keep your house.
A short sale is when lender agrees to take less than the total amount owed on the loan in a voluntary sale to a third party. But a short sale is anything but short—it is usually a very lengthy and complex process.
Contact San Diego Bankruptcy Law Firm to help you through this process or negotiate a short sale settlement.
Filing for bankruptcy can delay foreclosure.
When a person files for Chapter 13 or Chapter 7 bankruptcy, they usually receive immediate protection from creditors through a special court order known as an “automatic stay”. This means creditors must immediately stop their collection attempts.
If a foreclosure sale has been scheduled for your home, it will be postponed until the bankruptcy is finalized. Sometimes there are exceptions to this rule, so it is important to contact San Diego Bankruptcy Law Firm so we may discuss all of your options. Your initial consultation is free.
Filing for Chapter 13 bankruptcy can help you avoid foreclosure and keep you in your home. Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments.
A short sale can stop foreclosure.
It is important to remember a short sale can stop foreclosure, but it also has serious tax and credit consequences. In addition, some lenders and mortgage companies will refuse to do a short sale. Filing for bankruptcy can help you keep your house.
A short sale is when lender agrees to take less than the total amount owed on the loan in a voluntary sale to a third party. But a short sale is anything but short—it is usually a very lengthy and complex process.
Contact San Diego Bankruptcy Law Firm to help you through this process or negotiate a short sale settlement.
Friday, July 30, 2010
The San Diego Bankruptcy Law Firm Will Serve Clients Affected by the Closing of Kerry Steigerwalt's Pacific Law Center
The San Diego Bankruptcy Law Firm announces that it will serve clients that may have been affected by the "winding down" of Kerry Steigerwalt's Pacific Law Center and will only charge the client the remainder of what they already owe Pacific Law Center.
www.gobksandiego.com
"The San Diego Bankruptcy Law firm has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the closing" San Diego, CA (PRWEB) July 30, 2010
On June 30, 2010 the Union Tribune published an article entitled: Pacific Law Center "winding down," not adding clients. The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm have noticed an increase in inquiries from clients of Kerry Steigerwalt's Pacific Law Center. "We probably receive a couple of calls a week from individuals who are concerned about their case," says Todd Williams and Scott Schlegel who own the San Diego Bankruptcy Firm.
As a result of the demand the San Diego Bankruptcy Law Firm, with offices in Mission Valley, has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the "winding down" of Kerry Steigerwalt's Pacific Law Center and will only charge new clients the remainder of what they owe to Pacific Law Center. "Essentially, we can substitute in at no additional cost to the client," says Mr. Williams.
We think it is our obligation as professionals and as attorneys here in San Diego to help protect San Diegans when they need it most. "The last thing someone facing bankruptcy needs is to feel abandoned or to have to hire another attorney to finish something that has been partially paid for, especially when they are financially burdened already," says Maureen Enmark a bankruptcy attorney with the San Diego Bankruptcy Law Firm].
Pacific Law Center has indicated that "it is well-equipped to represent existing clients to the fullest" and the San Diego Bankruptcy Law Firm does not wish to interfere with clients that are pleased with their representation. However, for those that feel that they have been affected please feel free to contact us immediately to set up a free consultation at 619-260-1800, toll free at 877-GO-BK-619 or visit us on the web at www.gobksandiego.com.
www.gobksandiego.com
"The San Diego Bankruptcy Law firm has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the closing" San Diego, CA (PRWEB) July 30, 2010
On June 30, 2010 the Union Tribune published an article entitled: Pacific Law Center "winding down," not adding clients. The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm have noticed an increase in inquiries from clients of Kerry Steigerwalt's Pacific Law Center. "We probably receive a couple of calls a week from individuals who are concerned about their case," says Todd Williams and Scott Schlegel who own the San Diego Bankruptcy Firm.
As a result of the demand the San Diego Bankruptcy Law Firm, with offices in Mission Valley, has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the "winding down" of Kerry Steigerwalt's Pacific Law Center and will only charge new clients the remainder of what they owe to Pacific Law Center. "Essentially, we can substitute in at no additional cost to the client," says Mr. Williams.
We think it is our obligation as professionals and as attorneys here in San Diego to help protect San Diegans when they need it most. "The last thing someone facing bankruptcy needs is to feel abandoned or to have to hire another attorney to finish something that has been partially paid for, especially when they are financially burdened already," says Maureen Enmark a bankruptcy attorney with the San Diego Bankruptcy Law Firm].
Pacific Law Center has indicated that "it is well-equipped to represent existing clients to the fullest" and the San Diego Bankruptcy Law Firm does not wish to interfere with clients that are pleased with their representation. However, for those that feel that they have been affected please feel free to contact us immediately to set up a free consultation at 619-260-1800, toll free at 877-GO-BK-619 or visit us on the web at www.gobksandiego.com.
Monday, April 19, 2010
Foreclosure rates surge, biggest jump in 5 years. (San Diego Bankruptcy Attorneys & Lawyers)
By ALEX VEIGA, AP Real Estate Writer Alex Veiga, Ap Real Estate Writer – Thu Apr 15, 7:32 am ET: http://news.yahoo.com/s/ap/20100415/ap_on_bi_ge/us_foreclosure_rates?source=patrick.net
LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.
RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.
Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.
"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."
In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.
Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.
The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.
About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.
But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.
Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.
Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.
All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.
Foreclosure filings rose on an annual and quarterly basis in Arizona, however.
One in every 49 homes there received a foreclosure-related notice during the quarter.
Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.
California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.
(San Diego Bankruptcy Law Firm has Bankruptcy Lawyers and Bankruptcy Attorneys available 24 hours a day to answer your questions at www.gobksandiego.com.
LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.
RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.
Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.
"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."
In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.
Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.
The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.
About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.
But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.
Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.
Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.
All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.
Foreclosure filings rose on an annual and quarterly basis in Arizona, however.
One in every 49 homes there received a foreclosure-related notice during the quarter.
Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.
California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.
(San Diego Bankruptcy Law Firm has Bankruptcy Lawyers and Bankruptcy Attorneys available 24 hours a day to answer your questions at www.gobksandiego.com.
Wednesday, February 24, 2010
24% of residential homes upside down according to Reuters and CoreLogic
CoreLogic: 24% of residential properties upside down
Feb 23, 2010 17:58 EST
homeownership rate | negative equity
You don’t keep paying for something that you own.
http://blogs.reuters.com/rolfe-winkler/2010/02/23/corelogic-24-of-residential-properties-upside-down/?source=patrick.net
From FirstAmerican Core Logic:
…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.
Negative equity means the mortgage balance is higher than the value of the home.
The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.
“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.
But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”
Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.
This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.
IF YOU ARE HAVING DIFFICULTY KEEPING UP WITH YOUR BILLS, OR YOU ARE FACING FORECLOSURE, THE SAN DIEGO BANKRUPTCY LAW FIRM CAN HELP. VISIT US AT WWW.GOBKSANDIEGO.COM
Feb 23, 2010 17:58 EST
homeownership rate | negative equity
You don’t keep paying for something that you own.
http://blogs.reuters.com/rolfe-winkler/2010/02/23/corelogic-24-of-residential-properties-upside-down/?source=patrick.net
From FirstAmerican Core Logic:
…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.
Negative equity means the mortgage balance is higher than the value of the home.
The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.
“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.
But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”
Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.
This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.
IF YOU ARE HAVING DIFFICULTY KEEPING UP WITH YOUR BILLS, OR YOU ARE FACING FORECLOSURE, THE SAN DIEGO BANKRUPTCY LAW FIRM CAN HELP. VISIT US AT WWW.GOBKSANDIEGO.COM
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