Underwater Mortgages Hurting Everyone

This year alone, our banks have been lending more to European companies to the tune of $18 Billion. Compared to all of 2011 – that’s up more than 115%.

You may not think this bit of news is serious, but it is. Lending more to European companies leads to the U.S. fearing new and more bailouts. Just look at the falling stock market. We are currently stumbling as a consequence of the housing bubble. Bailing out companies, executives and shareholders would, at the very best, extend our economy’s recovery process. Japanese politicians made the same mistakes in the 1990’s suffering a long decline that remains in effect even today as Japan is still, well below their peak level.

Banks continue to pull back on lending to homeowners. One of the biggest obstacles is the fact so many homes are underwater. An underwater home is a home that’s worth less than what the homeowner owes on the mortgage.

Home sales are hurt by underwater mortgages. The homeowner can’t sell without taking a loss, and banks generally won’t accept a short sale. Banks are demanding higher down payments making it difficult for people to sell their homes and for others to buy.

Nearly 1/3 of mortgaged homes in the U.S. are underwater. The worst states in the country are Nevada, Arizona, Florida, Michigan and California. Oklahoma has the least amount at 5%. Nearly 2/3 of Nevada’s homes, and nearly 50% of Arizona’s homes are underwater. Very alarming, and not getting better.

Colorado comes in twelfth in the nation with 21% of its mortgages underwater. The number of homes underwater in Colorado is almost a quarter of a million with a value over $9 billion. In the nation, more than 11.1 million Americans own homes that are underwater.

Few families will ever be able to pay off their inflated mortgages. Many will default. As long as this $700 billion in underwater mortgages remains on the over 11.1 million Americans, foreclosures will continue to increase, the housing market will continue to struggle and the economy will either grind to a halt and stall, or fall.

Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.

This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.

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5 comments

  1. hi, i live in n.y. on long island and we are trying to refinance with chase. they have all of our paperwork but, keep telling us they need something more. we send that something more and they say they need another document! we are ready to just give up, because they have so much of our information already, there is nothing more they can possibly need!

  2. This is my fourth or fifth go around with Chase bank, i can’t even keep track now, incredible how they are allowed to treat people like this, is there anything we can do to stop chase. I cannot even find out who the underwriter is each time to denies my modification. Is it an unknown person in an office somewhere just coming in each day and stamping loan modification denied? Why is everything so secret? Why can’t they tell you up front what they need and what your chances are there is obviously a computer driven pass or fail process it should take just a few minutes to do and Chase should be more upfront and tell you what the qualifications are not just general and every case is different. What do they think we are that stupid we are all getting denied. It is funny I know two Chase employees who work with chase and one left them a few months ago after getting their chase mortgage modified. They borrow money from the government to safe themselves from Bankruptcy and then once they are on solid ground they pay back the government not sure if they paid everything back and then it is business as usual with harder conditions on borrowing money and the rest of us just trying to modify our loans are out in the cold while Chase Forecloses on us and takes the house and resells it at a lower rate and still makes money in the long run. Wow this is a great business model for the banks. Thanks Chase I was your customer for 22 years and never thought I would be treated like this. I am willing to join any group willing to fight against Chase and this horrible system for Modification. Please email me if you are interested. mauicraig@aol.com I am serious about taking in Chase and stopping this injustice.

    1. This story is far to common and the system is fundamentally broken! If you are located in Colorado, I am always happy help. The modification system is intentionally hidden. The underwriting guidelines change constently and are often a pure numbers game. It allows them to modify the mortgages that will make them the most money.

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