What’s the Real Scoop…

A statistic that you’ll sometimes hear quoted from various sources is…'”Approximately 30% of ALL homes in the United State are currently underwater.”

But is this the truth?  Not really.  First, it’s important to know that 30% of ALL the homes in the United States DO NOT HAVE A MORTGAGE.  They are owned Free & Clear of any encumbrance or indebtedness.  The remaining 70% of homes in the nation do have some sort of mortgage/indebtedness attached.  Of these homes, 30% are underwater…meaning, that more is owed on the mortgage than the current market value of the home.

So…the real scoop is that approximately 15% of ALL homes in the United States are currently underwater.  You see, it’s important to know what percentages are actually being referenced when we throw out statistics.  The housing market is going through rough times, but the reality is that most homeowners continue to pay their mortgages on time and according to a 2011 survey conducted by the Fannie Mae, 95 % of current homeowners view owning their home as a positive experience.  If you’d like to become a homeowner, we can help you.  Please contact us at 616-791-0511. (Graphic below courtesy of Steve Harney http://www.keepingcurrentmatters.com.

Percentage of Homes underwater-image courtesy of Steve Harney and Keeping Current Matters

BEFORE YOU THROW THE HOUSE KEYS BACK AT THE BANK…Options to Think About When Faced With a Housing Crisis.

SEARCH WEST MICHIGAN HOMES FOR SALE – Grand Rapids, MI Real Estate Statistics

The world of real estate has always held a fascination for folks like me.  But things have a way of getting really strange when people who don’t spend their waking, working moments around the mayhem and milieu of the brokerage world start telling astounding tales about their recent ‘encounters’ in real estate country.

Over the past month, I’ve had several conversations which would have been considered ‘beyond bizzare’ just a few short years ago.  Folks talking about people they know walking out the door of their homes and just giving the home back to the bank as casually as they might refer to a decision to perhaps purchase a car.

I know you might be thinking at a cursory reading that this reckless attitude is just symptomatic of the chaos that has been the hallmark of so much recent madness, but often during these exchanges, I actually sensed something else.  As I listen intently, the story involves so much more than initially stated. There’s an underlying, increasingly recognizable sad thread.

The bundle of trial includes years of struggle, trying to find jobs, being laid off, piling up debt to survive,stop signravaging investment accounts, pulling home equity out to last just a little longer, and then the straw that breaks the camel’s back occurs…one more thing that could not be anticipated which tips the scales.

Absolute & total weariness…and with resources strained beyond measure, it seems that the only thing to do is …WALK AWAY.  But before you do…


Before your feet set in motion a chain of events which will potentially impact your life for the NEXT DECADE, please consider ALL your options.  TALK to someone.  I’m astounded by the number of people who go through the ENTIRE Foreclosure process without talking to ANYONE about their options.

That’s right…

You do have OPTIONS. Before making a decision to simply stop attending to your obligations, ASK someone for help.  Speak to an Attorney, contact a Real Estate Broker or your Mortgage Lender.  Preferably, engage with all three sources or more…  Information is power when it comes to a decision which can handicap not just your ability to get a new home, but your ability to have a measure of control over your financial life for the foreseeable future.

Just for Starters, Ask about the following:

Will your bank accept a Deed in Lieu of Foreclosure AND forgive your debt in it’s entirety?

Can you pursue a Short Sale?

What are your options for Loan Modification?

What are your legal options and obligations?

An old African Proverb reminds us that “No Condition is Permanent in this world.”  Remember this truth…especially when things are tough.  This too shall pass…eventually.

picture courtesy of hoyasmeg on flickr





Does it Matter if I Make My Payments While Selling a Home Through a Short Sale?

As home prices have decline precipitously over the past couple of years, many homeowners have discovered that the price that their home can sell for in the local real estate market may be far less than what is owed on the mortgage.  When a home is Sold under these conditions, the transaction is referred to as a Short Sale.

One question which is on some folks’ minds is whether continuing to make payments on a declining asset makes sense.  Particularly when they do not stand to make a dime on a home they have been making payments on for years. 

Well, although defaults on mortgages have increased significantly over the past several years due to the economic down-turn and there is a sharp increase in the number of folks who have made a strategic decision to default on mortgage loan payments although they can well afford the payments, it is prudent for anyone thinking about this option to consider the latest word from HUD (the Department of Housing & Urban Development) on the topic. 

 Here’s a link to the Mortgagee Letter, a document which provides guidance to lenders and underwriters about WHO will be able to qualify for new FHA loans if they have gone through a Short Sale.

Reading through the letter, it seems to make sense to stay current on your loan even while continuing to try to sell your home…even if that involves a Short Sale.