St Louis Home Mortgage: Consumers Walking From Foreclosed Homes And Renting
Submitted by: Floyd J. Tapia
There may be some good news ahead for a nation facing a terrible foreclosure epidemic. Homeowners who are currently facing foreclosure could now get the support through a congressional bill that gives them the “right to rent.”
A new five year lease agreement may be in order and finally available for those families receiving a foreclosure notice which would help them to stay in their current home.
This alternate housing development would set a new fair market rental value on their home which would be allowed to rise with inflation.
Those who are strongly advocating this new bill say it is unfortunately a necessary evil due to foreclosures rising at an unprecedented rate. These numbers were based upon recent market data presented by RealtyTrac.
Other statistics show that foreclosures were up about 59 percent in the first three months of 2010 compared to numbers from the previous year.
But what is really shocking is that reports say that close to 61 million home mortgages are more than 60 days late.
Since the grand bailout of all bailouts known as HAMP has now been recognized as a huge failure, the “Right to Rent” proposal might be the one that makes most sense at this desperate stage in real estate.
The goal is for homeowners to stay in the home with lower housing costs while at the same time putting money in the bank’s pocket where none is flowing at present.
There will understandably be eligibility requirements for this program. One is that homes would be limited to those bought at or below the median price for their statistical city area.
In addition, all St. Louis home loan and national recipients had to have this address as their primary residence for no less than two years.
But sadly, for hundreds of thousands of consumers, their only solution so to say is simply to walk away from their home altogether and then renting a new home in a new area.
In March 2010, strategic defaults or walk aways were at an all time high of close to 31 percent.
However, many feel there should be no benefits or sympathy for the majority of those walking away. Why?
It is because those walking away from home are doing so because their home value is currently underwater and yet they could afford to continue paying their mortgage but have decided not to do so.
This is the anger and amazement being show by many on Capitol Hill. In fact, this startling number is up from 22 percent from March 2009.
Furthermore, this number increased by a whopping 24 percent when they learned that their neighbor did the very same thing or perhaps received a partial loan forgiveness.
A key deterrent to strategic default is the fear of losing a good credit score. Others feel it is still a factor of being honest and honorable with their debts.
In fact, St. Louis home mortgage analysts reported that about 74 percent of homeowners still believe it is very important to maintain good credit and this can be a factor in encouraging them not to walk away.
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Source:
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