Should I Consider Foreclosure

All homeowners are making the though decision of continuing to make there payments or simply save what cash they have left. This would deteriorate your credit and you will be foreclosed on. So the burning question when faced with this dilemma is “Should I stay or should I go" or should I refi my home?

The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. World markets are in chaos, we are all finding it increasingly difficult to make the payments, and they have run out of options. Many are choosing to simply walk away from their homes and allow the home to go into foreclosure and ultimately back to the bank. Is this the right move?

I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.I realize that is a very "Walton's way" of looking at it, and I think we all need to consider it to be the truth now.It was a shock to some to see national home value increase seven percent a year though the nineties.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Your not buried yet?Do you know your credit rating? Well then you obviously are able to get a house.With that the mid 90's saw lower home prices and stated income was normal and accepted.Now you have an Achilles heel with outrageous home value increases and people scrambling to spend that money of high priced toys. Cash was typically taken though home refinance to afford these toys and with that we saw the beginning of the end.

 

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.  If I walk from my home I can buy another house in two years(in theory) based on current lending standards which if property values keep going down I can buy another house or maybe even buy back my existing house at half the price I used to owe on before I walked.  This is all true you can walk, you could buy your home for less, but do you really want to?Everyone was aware of the loans they were getting into, we don't need a news story to tell us that a pizza boy can't afford a Beverly Hills mansion.   Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.Remember the historical significance of American fortitude, we have always fought for what we feel is right; and now we need to fight for our right to save our homes.