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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (25638)	11/26/2007 9:34:12 PM
From: Ilaine	Read Replies (2) \| Respond to of 217713

Is it getting worse or better? About the same, really. Still getting 1-3 new intakes a day. I think it will heat up after Christmas, and New Years Day, about the same time that the Christmas credit card bills come in. There are four bills to reform the bankruptcy law that Congress is considering. All four will give back the ability to "cram down" the unsecured portion of mortgages on primary residences in a Chapter 13. If I were able to strip away $100K or more in mortgage related debt, a lot of my clients could hold onto their houses, but a lot could not, the deal would never have worked, no matter what. The stories they tell are pretty much all the same. They were sold houses they could never have afforded by clever realtors and mortgage brokers who painted glowing pictures that had little basis in reality. In other words, they were suckers. To use your term, they were sheeple. But the alternative to Congressional "reformation" of contracts is neighborhood after neighborhood where half the houses are empty, vandalized hulks. I got a cold chill today when a couple came to see me and they live not all that far from my own neighborhood, a very nice neighborhood. But they weren't sheeple, exactly, they just had a fourth child, now have four children under the age of five, and day care costs more than the mom can make working, so she only works part time when the dad can watch the kids. I am going to try very hard to get them into a Chapter 13 (repayment plan) in the hope that Congress will act to reform the bankruptcy laws. But even if I could strip down the mortgage, it's still cheaper to rent an apartment, at least on the first pass, I suspect that the interest deduction may tip the balance in favor of keeping the house. The killer for them is the 2007 Honda Odyssey, with payments almost $500 a month. I guess they bought it before they found out she was pregnant again. But they're doing what bankruptcy lawyers all over the country are seeing, aghast. They pay the credit cards, they pay the car note, and they don't pay the mortgage. It's crazy, financially, but that's what they all seem to be doing. Aside from the mortgage and the car note, they have about $10K in debt. When they told me this, my jaw dropped. I had to keep asking the same question over and over, not able to fully wrap my head around the answer. I don't think they really comprehend the concept of home ownership. Latino "recent immigrants." They believe in paying their debts, which is a Good Thing, but they don't really comprehend the ramifications of defaulting on a mortgage and going through foreclosure. When I explained that after a "short sale" or a foreclosure or a deed in lieu of foreclosure, they'll still owe the bank at least $100K, maybe $150K, maybe $200K, they give me that uncomprehending look. The bank never mentioned that. They thought they could walk away clean, and keep their credit scores more or less intact, since they paid their credit cards on time.