banktime.com

Homeowners in trouble now have an option other than flat-out losing their house and being evicted through the process of a foreclosure. It’s come about as the result of federal officials and mortgage industry leaders combining their brain power to find ways of getting distressed homeowners to leave the domiciles they are not paying for, without the costly and ugly process of foreclosure and subsequent eviction.

What do you do when you are so upside down on your mortgage that the entire situation seems completely hopeless? Do you continue mailing in a mortgage payment that you can ill afford in this economy, essentially throwing away money that you can’t hope to get back, or do you walk away from the whole situation? Many American homeowners in distress are choosing the latter – enough to constitute something of a disturbing national trend.

By now, the full extent of damage from the so-called “liar loans” of the real estate boom have been almost completely felt. The reckless spending of ambitiously greedy consumers looking for their very own McMansion to inhabit when combined with devil-may-care banking underwriters and villainous real estate speculation combined fatally when the national housing market imploded on itself in 2008. Cutting corners to earn huge profits was the norm, and plenty of home loans went through with little to no documentation of crucial criteria like borrowers’ income or other credit obligations that might have an impact on their ability to repay.

Facing limited funds and the hopeless situation of robbing Peter to pay Paul, many Floridians are electing to pay their monthly credit card bills over their mortgages. Credit bureau TransUnion reported this week that, in a disturbing trend, a growing number of American homeowners are choosing to pay their plastic rather than the bill for the roof over their own heads.

In the current, distressed state of the American housing climate, the rate of bankruptcy filings is approaching an all-time high. It seems that everyone knows somebody losing their house. It’s a terrible and sometimes scary situation, true, but for many the home loss associated with a foreclosure is something of an end to a terrible chapter in their own life story. The massive financial headache is over, and life can at least go back to normal… right? Not so fast. You might THINK that you are off the hook from your sinking mortgage when you hand over the keys to the property, but that is not always the case.

Some have said that Detroit is the absolute worst area in the country right now in terms of economic factors. A website I visit frequently has called the Michigan city “Ground Zero for the American Nightmare,” and I personally believe that this is true. Within the Detroit metro area, hundreds of thousands of people are out of work and unable to find jobs. Some have been in that condition for over a year, with no end in sight to their misery.

A massive rental housing development in the state of New York will be handed over to the property owners’ creditors, it was announced recently. News that the Stuyvesant Town / Peter Cooper Village complex was badly underwater and that its owners, Tishman Speyer Properties and BlackRock Realty, were having trouble paying the bills rocked both the state and national housing industries.

According to a news report released this week, residential foreclosures in the state of New Jersey skyrocketed in the past year to make the Garden State one of the worst in the nation. According to Realty/Trac, a real estatet statistics firm, New Jersey’s foreclosure rate was up an astronomical twenty-nine percent from 2008 to 2009, with counties in the southern part of the state taking some of the hardest losses. Commercial foreclosures did far worse, rising sixty-eight percent in the past twelve months.

An alarming study from the U.K.-based Shelter housing charity has found that many Brits are making their monthly home payments on plastic, placing themselves at high risk of running into default. A fairly high number of the nation’s households – about six percent – had encountered financial problems in the last twelve months significant enough that the have had to turn to a credit card to meet their mortgage payment or rent.

Once upon a time, it might have been easier to buy a quarter-million dollar home than to rent an apartment. Around the middle of the last decade, the combination of ridiculously low lending standards and high demand for rented housing meant that apartment vacancies were low, and landlords could command top dollar for their properties. But oh, how the times have changed.