Should I Consider Foreclosure

Millions of US homeowners are finding it hard to keep up with payments, but there comes a time when those people will have to make the though decision of using up what little money they have left or saving it for themselves. The latter has a high risk of derogatory credit and foreclosure. 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. Values for most people's homes has decreased which is adding fuel to a crumbling US economy, and now those same people can't refinance or sell their homes. When a borrower decides to vacate the property the bank is just taking the house through foreclosure. Are you making the best 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 understand that is a safe thought and we all have to realize its a hard truth too.Seven percent a year increase on values for the national average came around in the 90s.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Do you have a heart beat?Do you know your FICO score? Obviously you can afford a house.With that the mid 90's saw lower home prices and stated income was normal and accepted.Now we see the exposure with home values increasing too fast and people tapping equity to purchase luxury items. Most of us took money from our homes to purchase the things we could not normally afford, and this began a cycle of refinancing for the new toy everyone wanted that year.

 

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.You might be thinking that you could just walk away from the house and possibly buy it back.  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.To avoid a depression we all need to keep in mind it is in our power to save our homes and the economy.