Foreclosures: Turning the American dream into a nightmare

Foreclosures: Turning the American dream into a nightmare
Most people strive toward the goal of home ownership for years, before ultimately attaining it. After all , shelter is a human necessity ranking just below food on the chain of human survival Home ownership changes our attitude in subtle yet profound ways. Once a home owner, a mower, a set of pruning shears, even a leaf blower and a set of tools of the landscape trade take space in your new garage. Then there are the tax breaks, like interest deduction and property tax deduction.. And finally, you can paint the walls in whatever color your heart desires. Owning a home in the right sub division can bring status and a tingling feeling deep inside of accomplishment and security; you finally have a place you can call your own.

But the upkeep on the property is now on you . And when the boiler conks out that's on you as well. There's no more rent but there's a mortgage and, that too is due every month. Now you owe the bank more more than you make in five years. Not paying is not an option; the payment is due even if you move out, walk away. It used to be that you built up equity when you bought a house, no more. Now the house is not worth the money you plunked to buy it in the first place. You no longer face an increase when the lease expires instead, you are staring at a mortgage rate adjustment that can up your payments from $1800.00 to $ 2500.00 with a single keystroke.

Last year there were a record number of defaults on mortgages. Once proud home owners are now trapped in neighborhood's ravaged by the foreclosure pandemic sweeping the country. According to RealtyTrac,, foreclosures in the Peach State were up 24 % in 2007 and 79 % in 2008 from the foreclosure numbers in 2006. The uptick in foreclosures continues to plague Georgia in general and Dekalb in particular. There were 1100 foreclosures in Dekalb County in the month of January, accounting for 10% of the total for the state of Georgia. And there are yet more in the pipeline that are due to foreclose in the coming months. There is no end in sight. Home owners are unable to sell as quickly as they once could to try to beat foreclosure because there are simply too many homes on the market. Thousands of home owners are facing interest rate adjustments on their adjustable rate mortgages handed out like candy during the real estate boom a few years ago. Home values have plummeted and and the problem faced by many is that they are unable to refinance because the house is now worth less than is owed to their lender. There are few viable options available to sellers in the current market. But with foreclosures destabilizing the market, elected officials have finally begun to tale notice.

In an effort to spur loan modifications the Federal National Mortgage Association (Fannie Mae) and HUD are offering cash incentives to lenders for every loan they modify. In addition, Fannie Mae has proposed that lenders allow home owners in distress to modify their loans to take advantage of lower interest rates or enter into repayment plans. However, the repayment plan is not much help because it merely postpones the inevitable. Usually, it requires borrower to pay the current mortgage in addition to part of the past due amount until the arrears are fully paid. Home owners who have lost their jobs cannot afford current payments, let alone payment on the arrears, so this option is of little help. Loan modification is the best option for most home owners; It may allow the home owner to consolidate his first and second mortgages, get a lower interest rate or, extend the length of the loan to lessen the payment. One Snellville home owner I spoke with succeeded in getting his mortgage modified by is bank, reducing the payment from $1170.0 m t $ 517.00. " Now that my wife has been laid off," he says, " I don't know what we're going to do, because the bank won't modify if you don't have a job. You must have income", he says, " otherwise you are out of luck. To tell the truth", Noel says, "we could not afford the payment even if they reduced it to $100.00. I Don't know what we are going to do when my wife's unemployment runs out". Desperate to save their credit, many home owners have taken the short sale route. They, with the consent of their lender, have sold their homes for less than is owed to the lender. The flood of foreclosures inundating the banks have nudged them in this direction; they are more willing than ever before to to allow borrowers to sell short. This option is preferable to increasing their inventory of unsold foreclosed homes which lose value and further blight neighborhoods.

Home owners in distress should take advantage of available programs. The Hope Hot line 1-888-995- Hope, offers help and counseling. Dekalb County has set up a foreclosure task force to assist home owners in distress. The task force can be reached at: 404-286-3378. In January, Dekalb established the Neighborhood Stabilization Program (NSP)using HUD money. The money will be used in areas affected by the current foreclosure crisis. Contact the NSP at 404-286-3308