More Homeowners are Underwater on Their Mortgages
By Carmen Dellutri on Oct 21, 2008 in Foreclosure News, Mortgage Issues
The age old saying that: The purchase of a home is the single largest investment most people will ever make, has turned into a nightmare for the majority of homeowners in Southwest Florida.
There are over 75 million homeowners in the United States, and it is estimated that, on a National level, one in seven homeowners are upside down or underwater on their mortgages. That is over 11 million people. Although I have heard different estimates, there are approximately 10,000 foreclosures filed daily.
Well, if these 11 million people default on their mortgages, that means we have 1,100 more days of the mortgage meltdown or at least another 3 years. The news is much worse if you just look at the statistics of the people who purchased their home in the last 5 years.The mortgage meltdown has caused more homeowners in the United States to lose more wealth than any other natural disaster than I can remember. Of course, there are those who would argue the subject. These people really couldn’t afford homes anyhow, so they are not really losing anything. Or, it was only the bank’s money and they made silly loans to start with. Or, it was the realtor and mortgage brokers fault, because they were selling false dreams in search of a commission.
Quite frankly, I am not impressed with any of these arguments at all. They are comparable to swiss cheese because there are quite a few holes in each argument. The bottom line is that for all of those people fighting to save their homes, the market just keeps getting worse.
In some locations in the United States, the market value of homes has dropped 30%. Right here in Southwest Florida, the market is down at least 25% – 30% and still dropping. Yesterday, I saw a sign advertising a lot in Lehigh Acres, Florida for $4,000.00. Several years ago, people would have laughed if you tried to purchase the same lot for less than $30,000.00.
The problem I see is that the Federal Government has passed the Bailout Bill and the Hope for Homeowners Bill into law, yet it does not seem to be working. Today they are talking about another stimulus package. My question on the first stimulus was the same as it will be when the Government borrows another $150,000,000,000.00. How exactly will this help save homes? $600 per household or person is not going to save any homes in Southwest Florida.
The other day, I wrote a blog for the Bankruptcy Law Network where I discussed the possibility that bankruptcy filings were going to continue to rise in the wake of the Federal Government’s failure to take steps to control the housing market. The more I see about how the White House, Fed and Treasury are handling this issue, the more disgusted I become.
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