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To Pay or Not to Pay, that is the Question

February 6th, 2010 9:06 AM

Today's housing market poses a serious question to home owners, to pay for a home that has lost value, and to be more precise, should they stay in an investment that has become a liability. The challenges of today's housing market are compounded by the current banking position, to not consider home owners for modification until they are behind on their mortgage.

While these questions, and circumstances concern and frustrate many home owners, there is a larger and more serious concern for the future of these well intentioned home owners who wish to stay in their home and honor their loan obligations. What about the principal, the mortgage balance? While some home owners have been able to negotiate a lower payment, far less have received any principal reduction.

This situation sets up a future challenge for the homeowner. Over the next 3 to 5 years it is expected that the Housing Crisis will have ended and worked itself out, but for homeowners who remain upside down in their loans, their nightmare will have just began. Banks and the government will be far less flexible in negotiations with homeowners, and many people who are today, satisfied with their modifications, will finally have to face the fact that their asset had become a liability long before they realized it.

Posted by Dax DUNN on February 6th, 2010 9:06 AMPost a Comment (0)

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