Homes Worth 3/4 What Homeowners Owe?
A recent article in the New York Times said that the U.S. Treasury Department projects that by mid June of this year the value of the homes of 5.1 million homeowners will be less than 75 percent of what they owe on the mortgage.
Some are suggesting that this may be the magic number that has more underwater homeowners walking away from their mortgages. With mortgage modifications slow to materialize for people having trouble with their mortgage payments, many who struggle to make it will decide that the battle should be over.
The Treasury Department and others argue that more people talk about walking away than actually do, but in the current economic climate the emotional attachement that many feel for their home is beginning to melt into thin air.
In many cases, people look to bankruptcy to help them through their financial problems. Bankruptcy can clear your unsecured debt and adjust the amount you owe on your car, but bankruptcy courts cannot alter the terms of a mortgage, a terrible injustice in my opinion.
Allowing people in financial distress to get help restructuring all their debt should be a priority in the United States. Instead, this country seems to want to protect nothing but bonuses paid to executives at banks who inflated profits with financial transactions that had little real value.
