Earlier this month, the Wall Street Journal online Guide to Property reported a new problem with a growing number of borrowers. Those that can afford their mortgage payments are also walking away from their homes. Economists are hoping that this is just a small issue, but the numbers appear to be gaining. Homeowners are deciding that they no longer want to pay on homes with negative equity; that is, they owe more on the property than the current value.
Especially hard hit are those who purchased property to flip, and the tough credit market has made it next to impossible for would-be sellers to find buyers.
Walking away from a home used to be seen as a last resort, but the trend appears to be taking hold nationwide. Also, the number of suspicious fires at homes due to be foreclosed upon is on the rise. California seems to have the largest number of fires per capita on soon-to-be foreclosed on properties.
On a happier note, the Congress appears to be closer to putting through some programs to assist delinquent borrowers in an effort to revive the housing market.
The current administration has been under steady pressure to pass additional legislation to help struggling homeowners. Mr. Bush is wary of government over reaction and insists on moderate expansion of federal assistance for lower-income home buyers only.
Lawmakers are hoping to put through some plans that would prompt lenders to take some loss, though not as much as if the property were to be foreclosed on. Progress on the bills is expected to become more aggressive after the Congressional Easter Break.
So, 'til next time, it's all good!
Tuesday, March 18, 2008
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