Loan modification news: A 60 Minutes special that was aired on CBS a few days ago shed light on the growing housing crisis in the United States that continues to increase in severity. The program focused on Cleveland, Ohio to a large degree, as a state that has been hit extremely hard by the bursting of the housing market bubble in 2006-2007.
Throughout the U.S., the combination of foreclosures and nose-diving home values has left hundreds of thousands of properties vacant and vulnerable to vandalization and looting. The issue has become so bad, that country officials in Cleveland have resorted to demolishing over a thousand homes, with a further 20,000 at least scheduled for demolition. The stated goal is to salvage whatever value is left in nearby homes, as opposed to allowing entire neighborhoods to fall into ruin. In Cuyahoga Country in Cleveland, 1 out of every 5 homes now officially stands vacant.
Because of the housing market collapse that was brought about in no small way by the lies and greed of corporate America, home values have plummeted to the point where as much as a quarter of the properties in the country are worth less than the loans that are outstanding on them.
The problem is of course aggravated by a discouragingly high unemployment rate, and we now have the situation in which homes across the country are being foreclosed on at record levels. The thousands of abandoned homes that are now found in numerous neighborhoods across America are now also contributing to declining house values as they fall prey to looters and thieves who reduce them to near rubble, lowering their value to practically zero, and along with it the value of neighboring properties.
Watching this program, I couldn’t help get the impression that blame was being shifted on the homeowners of America who are walking away from mortgages that far outweigh the value of their homes. The program was intentional about featuring the views of homeowners in Cleveland who express the sentiment that when they signed on the dotted line, they entered into a mortgage contract for which they are responsible, and they are committed to making good on repaying their loan by all means possible, whatever it takes. The implication of course is that if you walk away from your mortgage, no matter what the circumstances, you are an individual who lacks integrity and honor.
I find this kind of insinuation to be highly peculiar to say the least. Shame on all these no-good homeowners who don’t have the decency to honor their financial obligations and repay the money that they they borrowed. Seriously? Aren’t we forgetting a huge part of the picture? What about the corporate parasites who sold toxic assets by the truckload and misrepresented the nature of their portfolios? What about the predatory lenders who exploited ordinary, hard working Americans and duped them into mortgage agreements that they knew to be unsound and unsustainable? And what’s worse, when all these leeches faced the threat of going under, it was Mr. and Ms. Taxpayer who was called upon to bail them out so that they never faced the consequences of their greed and corruption.
The middle class in America is being eradicated, slowly but surely. In the last few years since the housing and financial crisis, as many as 100 million Americans who were previously considered to be middle class, find themselves teetering on the brink of the lower class or are already firmly stuck in it. Rather than help good individuals and families to hold on to their homes and recoup at least a measure of cost, banks and county officials think it more suitable to trash homes entirely, rather than work with American citizens who are desperately intent on keeping a roof that they seek to own over their heads.
So, as an American homeowner, are you to blame for the ever-worsening housing market condition in this country? Is it your responsibility to work your fingers to the bone to pay off an overwhelmingly toxic mortgage that will never amount to any real investment? What are your thoughts on the issue? Share them with us on Twitter, Facebook, or Mycaal.com.
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About Carla Ghosn
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CEO and Founder of Caal (mycaal.com) keen on helping American homeowners save their home. If you need help with your loan modification, visit www.mycaal.com to get help on pre-qualifying your loan for approval, as well as preparing and printing your loan modification package online. |
Carla, your article makes so much sense and benefits all concerned.
For banks to opt to kick families out of their homes backfires and is negative to all.
This is like they shoot themselves in the foot.
As you stated, banks and owners can benefit far more by reducing the loan balances where at least they would get part of the loan repaid rather than evict the owners where the banks get nothing and subject themselves to paying the taxes and other demolition expenses and such action devalues that other homes that the bank have loans on in same neighborhood. .
The domino effect is that evicted owners would shift from tax payers to become a liability to the system, community and state where their credit would be ruined and they would be unable to meet other basic obligations which in turn causes others to lose expected income and such cycle causes others to fall behind. It becomes a vicious circle.
Carla, you mentioned in another communication that manybanks are still making money because they bought default multiple insurance policies against such default.
Please share some more about that.
Does this mean that the banks are doing all this to get richer while the rest of us are getting screwed?
If so, there should be some legislation against such apparent abuse.
After all, it was taxpayers money that bailed out the banks.
Thank you for your passion about this important topic.
AGK
Great feedback