An article in today’s Wall Street Journal, reports that 23% of US homeowners owe more than their home is worth. In Florida, this number is a staggering 45%. The national figure means nearly 10.7 million households have negative equity in ther homes, a troubling figure that poses great risk to housing and the overall economy.
LENDERS JUST DON’T GET IT
As an attorney actively fighting foreclosure for hundreds of homeowners, I can confidently say that it is virtually impossible for most foreclosing lenders to take a home back from a homeowner and I often wonder just what would happen if homeowners across the country just stopped paying their mortgage. I’m certainly not advocating that homeowners not pay their mortgage, but in the vast majorityof my cases, I have homeowners who want to stay in their home and want to and can afford to make a mortgage payment that is usually about 70-80% of what the lender is currently owed.
CLIENTS WORK HARD TO SOLVE THE PROBLEM BUT GET NO RESPONSE FROM THEIR LENDERS!
I require my clients to actively work with their lenders to try and negotiate a modification or other solution….and I require my clients to keep a detailed log of all their phone calls, faxes, emails and other attempts to communicate with their lender. After reviewing my client’s efforts for many months now, I can say that virtually every client has spent hours and hours and made countless phone calls and other attempts to work with their lender, but very few have gotten anywhere.
This pattern and practice of incompetence, inflexibility and irrational business behavior is a symptom of deep and serious underlying rot within the housing and mortgage market. Until this changes, the crisis will only get worse.