Sarasota homes for sale will increase as struggling homeowners rely on “band-aid” to provide time before they walk away from underwater houses!
Are mortgage debt owners doing “enough” to reduce foreclosures and protect THEIR own interests?
Citigroup claims it’s reducing payments to an average of $500 for three months for some customers who have recently lost their jobs.
Other banks claim to give struggling homeowners a break from payments for as long as six months.
The following “solutions” are not addressing the problem, thus creating MORE foreclosures:
- Reinstatement Plan
- Repayment Plan
- Loan Modification/Loan restructuring
- Loan Refinance
- Loan Forbearance
- Partial Claim
- Pre-Foreclosure Sale/Short Sale
- Deed-in-Lieu of Foreclosure
Nearly every program today is a band-aid at best. In the short term, a band-aid will help reduce the tide of foreclosures and homelessness. However, these band-aids are dangerous if thought to be long-term solutions…from what struggling homeowners are telling me.
Click Read More below now for a growing trend held at bay only by a band-aid.
THE BAND-AID SOLUTION
Call me now if you or someone you know is facing foreclosure!
Daily, I talk with homeowners who gladly will take the band-aid just to avoid losing their homes. However, getting the band-aid is more challenging than you might be aware. For whatever reason(s), loan modifications, refinances, short sales, etc are stuck in the mud!
Yet, the PROBLEM today is massive joblessness. Homeowners are losing their jobs. At least in Sarasota-Bradenton, most jobs are service related. When housing tanked, it dragged most trades with it.
Short term, mortgage debt owners (banks and secondary market investors) must keep homeowners in their homes for THEIR own (financial) benefit. For a moment, you thought I was some bleeding heart liberal thinking every homeowner in trouble today should receive a free-and-clear house as a gift.
That’s insane, isn’t it? Instead, here’s insanity on the part of the mortgage debt owners:
1. Homeowner in trouble contacts debt owner (or servicer) about pending job loss.
2. Homeowner needs help & desperately wants to keep the house (their home).
3. Debt owner runs through a few numbers, clearly determining homeowner falls with guidelines of Obama’s HAMP program. Okay, get the payment to within 31% of homeowner’s gross monthly income. Not so fast…. Bank loses paperwork…again and again again or something equally maddening.
4. Loan modification fails by no fault of the homeowner.
5. Debt owner begins foreclosure process, which in Florida will take months…maybe years! Homeowner stays or leaves during foreclosure process. Property may or may not be kept up or secured with or without utilities (that is, a/c).
NOTE TO SMI’s: MOST distressed properties in Sarasota are vacant with no utilities. That is, no a/c during steamy, muggy Florida. In many vacant, distressed properties, there’s mold! Contractors cannot accurately quote damage until they dig in. Property values are further affected by distressed properties.
6. Debt owners LOSE $1,000s — tens of thousands in lost interest, attorney’s & court fees, insurance, taxes, loss of value & deterioration. The average foreclosure in and around Sarasota costs a debt owner around $50,000!
Daily, I meet with homeowners who should not be facing foreclosure. They did not overextend themselves with a subprime loan.
They didn’t lie on a loan application or suck out all their “equity” during the boom.
Rather, many homeowners facing foreclosure today are “regular” people throughout Sarasota and Bradenton, who now are jobless.
By no fault of their own, they’ve lost their jobs and ability to pay their mortgage. Before you get the idea I’m some bleeding heart who thinks banks should cancel mortgages and give struggling homeowners a gift, I don’t.
Instead, banks and mortgage debt owners should CONTINUE thinking only of their best interests. Their best interest is NOT to foreclose on homeowners.
Most definitely, foreclosures are hitting homeowners on Longboat and Siesta Keys as well, with homeowners whose troubles include loss of net worth and joblessness.
Of course, I probably don’t have a clue how banks are profiting from this collapse. Here, I’m thinking banks (debt owners) are losing billions out of stupidity and for all I know they’re probably profiting by billions. One dire prediction is that I will see more strategic foreclosure (or “walkaways”) from property owners who can’t get their payments modified and realize their properties NEVER will float again in their lifetimes.
I expect some emotional responses to this article. I realize some people will beat the “moral obligation” drum. What I can tell you right now is that homeowners planning strategic “walk-aways” could care less how they’re perceived. What they’re telling me is that they’re making business decisions just as bankers and politicians are making business decisions.
Sarasota homes for sale will see more RENTERS as more and more former homeowners get their payment modified and walk away at a later time. At least 1x per day, a homeowner tells me he/she/they have no intention of keeping the property worth $50,000+ LESS than what they owe. They’re buying themselves time and strategically planning their “walk-away”. Think about it, if you’re $50,000-$150,000 “underwater” on your mortgage, are you willing to overpay on your “rent” to the bank for a property that might never break even?
