Owning a home has become more and more complicated, especially for recent buyers. Recent as in, since about 2007. Many homes are underwater now – that means mortgage holders owe more on the house than it is worth.
IFO has a neighbor who “bought” the house behind her. He has a complicated life. First, he lost his job. Then, he found another one – it was great, but a one-hour drive from his home. Then, he met a lovely lady who lived near his job. So, he moved in with her and put his house up for sale at a price a bit higher than he had paid for it.
Big mistake! No buyers and advice from his realtor to lower the price to a more reasonable level. Uh, oh. If the house had sold at that “reasonable” price, he would still have owed the bank money! Finally, he mailed his keys to the bank, quit making payments, and walked away. The bank put the house up for sale, but would not foreclose on the “owner.”
Now, you tell us. Who owns that house????
In this week’s latest Business Journal, we have the story of another “homeowner” in Portland, Oregon. It chronicles the apparent failure of the government’s mortgage payment assistance program – $220 million given to Oregon to “pay the mortgages of roughly 5,000 struggling homeowners for one year, allowing recipients critical time to get back on their financial feet.” [Dream on!!!]
And how many people reading that article realize that the program is not helping the “homeowners.” The money is going to the banks.
IFO, for her day job, wrote a huge story on Dec. 8, 2010, about that program, which was just getting started. Sorry, business news fans, her editor did not post the story on the paper’s website. She also wrote an editorial, and he didn’t even publish that in the print edition. So, we’re going to publish it in the next post.