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Mortgages: Drowning in the underwater debate

The discussion, this morning, reminds me of a one-up contest for how bad things can be.

My colleague Paul Owers reported that four in ten single family homeowners with a mortgage in South Florida owe more than the property is worth.

And Broward Country Property Appraiser Lori Parrish said on CBS4 this morning to Michael Williams, “Over 50 percent and maybe over 70 percent of families in Broward are upside down on their mortgages.”

The discussion I’d like to have is what we’re going to do about this.

No more descriptions of what’s wrong. No more who-is-to-blame back and forth. I’d like to hear someone proposing a way to resolve it.

Treasury officials said last week that they are working on the issue.

But there’s little else. Frankly, I’m not hearing anything about resolving the issue from major lenders.

What ideas do you have?

Categories: Mortgages (30)
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I'd love to know what is going to be done about this. I would love some help and am looking forward to that break.


As a homeowner with almost 75k in negative equity, this needs to be addressed yesterday! The congress actually passed a great program to deal with this back in Oct 2008, but it has been a dismal failure because lenders did not participate. It involved FHA refinances for underwater borrorwers at 97.5% of the current appraised value. You can read about it here:

Here is the acutal link to program details on the official HUD/FHA site. We need a program like this made available to all underwater homeowners, the economic effects of lowering monthly payments and restoring equity (and confidence) will be multiplied many times over.

Why do underwater homeowners need a break? they signed a contract, live with it! i'm underwater, but i'm hopeful that the market will swing back up one day. bottom line, it's your home, not a savings account. geez. obama can't save you from everything. this is the attitude that got us here in the first place.

All homeowners, including investors, must be considered for a homeowners' "stimulus"
Remember that if investors divest themselves of their losses, there goes another sector of the housing market.

Betty, you are a moron. I live in a condo community, and every time another owner walks, my property value goes down, and my HOA fees go up. I once lived in a fairly nice community, now I have crackheads for neighbors. I believe in the sanctity of contracts, but when my HOA fees reach 50% of my monthly mortgage payment, I'm walking, too.

Hey Howie... Betty has the right idea... you made the bed now lie in it... if you need to walk... walk. The government (aka the taxpayers... meaning me and everyone else) shouldn't have to bail your sorry arse out for making a bad decision. BTW... I am underwater also! Again, if you need to walk... walk... that's what credit scores are for... your's will be ruined temporarily but you will survive. Less Government!

I'm one of those underwater homeowners. I'm not asking the government for anything to help bail me out. I bought 13 years ago and I refinanced through the good years to pay off other debt and keep my business running. Since then I have lost my income and now work 3 jobs to try and keep a roof over my kids heads and food on the table. I signed a contract and the market will come back some day. I love my house and woudl stay 20 more years but I need help now. I need to get my payments reduced for 12-36 months to help me get back on my feet and deal with medical & credit card bill I have in collection. If my lender would just help me with reducing my payments 50% for a few years It would truly help me and a lot of other people. All the government is good for is spending $$ on programs which cost too much to start and takes too long to work. I hope the lenders are reading this.

sunphish, why don't you tell me what was the bad decision my "sorry arse" made? I pay my taxes, too. This does not make me part of an elite group, just a law-abiding citizen, that is allowed to voice my approval or disapproval of how the government is spending "my money" in the ballot box. I think you are the "sorry arse", who likes to hear himself talk.

The problem is not that you're underwater, it's that the economy is bad. Gas, food, insurance all cost far more than they did when you made your deal on your property. That makes it harder to pay for. And that's hard to swallow when you look at the negative equity you're building up.

Foreclosures are being prosecuted and people tossed out of their homes on the basis of a defective assignment?


sunphish your comments are have no idea who you are bailing out...and its not everyday people...learn something today..try listening to this:

The Indymac Slap in our Face. 02.08.10

Heres a perfect example of how they are screwing people:this is fair?, is this helping anyone?

MadInPVBFL: (February 11, 2010 5:15am)
I missed my Oct payment with OWB. On Nov 17th they told me to pay up by Dec 18th or else. I wrote to them and said I wouldn't be able to pay until after the new year. On Jan 15th I called to make the late payments. I owed them $4564 for 4 payments. They told me my reinstatement amount was now $11,332 because they added Attorney fees, etc!! I owe them $153K and my house is worth about $230K. They refuse to remove the attorney fees and won't accept anything less than the full amount of $11K! I spoke to and she referred me to escalation specialist who offered me a repayment plan but the plan still included the additional fees which I can't afford to pay! OWB cannot find my original note because it has been lost or destroyed. If they foreclose on me, is it true that someone can come along later with the original note and sue me again?


you need an attorney really bad. If the bank can not find the original note, an attorney can help you negotiate. The bank is currently unable to prove what the terms of the loan were that you signed. Get a lawyer asap

RED ALERT: Mortgage Bankers Strongly Oppose New Foreclosure Bill in California – SBX8 38

These guys are a bunch of farbisseners. And I think every homeowner in America should know just what the Mortgage Bankers Association is all about. Because these guys are no one’s friend. And they should all ech hob dir in drerd.

Life after denial
President Obama's foreclosure-prevention program was touted as helping nearly 4 million people. 5 families talk about what happens when that help doesn't come.

Elizabeth Warren Introduces COP's February Report

Heres a possible solution to this problem.
For those who are underwater on their mortgages and have been faithful in making their payments on time and in full and have maintained a stellar credit score, the banks/mortgage companies should reward those people and reduce those peoples mortgages to the actual property value of their homes. This would eliminate the possibility of those people walking away in the future because they are underwater and give others the incentive to keep up on their payments. For those who just walk away and face foreclosure, NOTHING! Your decision, you're on your own. Face the music.

Does anybody know what's Loco's situation now. I'm curious to know about how Loco resolved his issue....anybody

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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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