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Selling Your Home For Less Than You Owe

If you've taken out a large mortgage, and perhaps refinanced to cover remodeling or other expenses, you may find yourself unable to keep up with your mortgage payment after a layoff, divorce or illness. More and more people are finding they need to sell their homes for less than they owe on the mortgages, known as a "short sale."

Selling short is definitely better than foreclosure, which stays on your credit record for ten years. But it's best to try to work things out with your lender before going through the embarrassing and laborious process of selling your home on a short sale. complete story

Source: Lawyers.com - Sherrie Bennett

Need to Stop Foreclosure? Want to Save your Credit? We may have a solution - Florida Short Sale Realty

Prices have dropped. A lot. But it's still surprisingly hard to find buyers.

Maybe you've started thinking that now you can finally find a buyer for your house. After all, this summer the National Association of Homebuilders asserted that houses were more affordable than at any time during the previous four years. Prices have slid so far that many homes are now within the reach of people who couldn't buy during the bubble.

The price may be right, but if buyers can't borrow enough, the house isn't affordable. Difficulty borrowing is keeping many Americans from buying. "The industry went from little or no credit standards to credit standards on steroids," says Marc Savitt, president of the National Association of Mortgage Brokers.

That fear may be the biggest obstacle keeping buyers from knocking on your door. During the boom, people were willing to spend as much as they did on housing because they thought that they were putting away money for retirement or college. And they could draw on their equity for renovations or other goodies.

"Nearly a quarter of potential buyers are on the sidelines waiting for some form of encouragement," says Walter Molony, spokesman for the National Association of Realtors. Maybe they're looking for some sign that houses have truly become more affordable. The price declines haven't done that yet. complete story

Source: CNN Money.com -Money Magazine's Stephen Gandel and Amanda Gengler

Avoid Foreclosure with Short Sale Services  No Equity? Behind on Payments? Facing Foreclosure? Orlando Short Sale Center - Florida Short Sale Center

Mortgage Walk Aways - Foreclosure Trend

Voluntary Defaults

America's house price time bomb

"It's a business decision for their family that the smartest thing they can do is walk away from their home"

Faced with seemingly never-ending falls in the value of their properties, some American home-owners are taking radical action; they are choosing to walk away from homes and their mortgages.

Worrying development

Ms Trainer says she feels no moral obligation to go on paying a loan on a property that is going to go on losing her money. She says her friends support her decision.

"I think people are taking a more cold-hearted look at it," she says.

"Is the bank going to pay for my retirement because I was a good girl and paid my mortgage, even though legally I didn't have to?"

Professor Wachter believes that, to date, most people have had their homes repossessed because they could not manage the repayments.

The trend of people now positively choosing to walk away because it makes financial sense to do so is a worrying new development.

"The dangers are extraordinary," Professor Wachter says.

"If all that is needed is that the house value is less than the mortgage value, there is a large number of homeowners in the United States who are in that situation".

"This is becoming a tsunami of voluntary defaults"

Total disaster

It is impossible to know for sure how many of the people who are now walking away from their homes could have gone on paying their mortgages.

But Professor Nouriel Roubini of New York University, one of the first economists to warn of the dangers of the American house price boom, believes the number of people positively choosing to walk away is growing rapidly.

"This is becoming a tsunami of voluntary defaults," Professor Roubini says.

"The losses for the financial system from people walking away could be of the order of one trillion dollars when the entire capital of the US banking system is only $1.3 trillion.

"You could have most of the US banking system wiped out, so this is a total disaster."

Which is why it is not just US policymakers who are hoping America's new, multi-billion dollar initiative to stabilise the housing market will succeed in its aims and thus make walking away less attractive.

Because if it fails, the economic fallout could be felt far beyond America's shores. Complete Story

Source: BBC News by Michael Robinson

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