Living After Foreclosure

Few states have been hit harder by the foreclosure mess than Florida.  Properties in some areas are worth half of what they were at their peak.  A sizable number of underwater borrowers — those owing more than their homes are currently worth — have simply stopped making payments on their mortgages, using the extra money to pay off other debts, and then forcing the lenders to take the property back through foreclosure proceedings.

It sticks a loss to the bank, of course, but banks aren’t taking this lying down.  Faced with over half a million borrowers (an estimate by Experian) banks are playing tougher:

• They recognize the likely patterns and encourage the at-risk-of-defaulting homeowners to tough it out.  This keeps the payments coming in.
• They go after defaulted borrowers with other legal avenues such as deficiency judgments to collect the difference between the sale price (after the foreclosure) and the amount owed.

Just because the foreclosure process is becoming more socially acceptable doesn’t mean that (a) there aren’t consequences, and (b) it’s not ethically wrong.  A house is a place to live first and foremost — not an investment first and foremost.  Cutting bait on paper losses is shortsighted, because the house still provides shelter.  It just hasn’t produced the double-digit gains investors were expecting.  Oh well.

• Will your lender work with you? This article from the Chicago Tribune made a point about lenders that's an unfortunate reality: The more equity you have in your home, the less eager your lender may be to work with you. It's an ironic fallout of the foreclosure crisis that those who have been the most diligent......
• Steps to take if you’re facing foreclosure, Part 2 Liz Pulliam Weston wrote recently on steps to take if you’re facing foreclosure.  There are smart ways to go about it, and not-so-smart ways.  Here are three more of her suggestions with some of my comments: Be realistic.  A house is just a house.  It may have a lot of......
• HUD tips for avoiding foreclosure: Part 1 The US Department of Housing and Urban Development has some good advice for people that are in danger of losing their home through foreclosure. Here are a couple of items from that list, with some discussion. Don't ignore the problem. "The further behind you become, the harder it will be......
• Don't expect banks to be nice to you for buying their foreclosures We just purchased a new house this week.  It happened to be a foreclosure.  It was in excellent shape even compared to a house not in foreclosure. I have to say, though, the seller jerked us around quite a bit throughout the whole process.  That wasn't pleasant at all.  But......

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• Late Loan #2, in the Process of Paying The loan discussed in previous posts is in the process of paying: One Loan Late. Not supposed to happen to AA. What does that mean? and Oh No! Another Late Loan... Review of Late Loan #2 Their loan shows a payment as of the 2nd attempt.  So my prediction that the loan......
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