Two key aspects of the current housing crisis

Two key aspects of the current housing crisis that could and probably will occur this coming year. First, the vast majority of home owners will “see” the value of their property drop compared to the original price paid for the residence. This will happen because the housing crisis has not bottomed out and will not do so at least the first three quarters of this year. This loss of value will impact the ability to refinance, sell or do anything financially with the property. Second, as property values plummet and more homeowners lose more equity in their homes they will be faced with a tough decision. Keep making payments on Denver blue sky value that no longer is there or simply turn the property back to the mortgage company and let them deal with the problem since it originated with the mortgage industry in the first place. The money they save will allow them to eat, put gas in the car and ease their emotional state of mind. Should more home owners choose to give up on property that no longer is worth the original price, and won’t be for decades to come, the downward spiral will continue thereby causing property values to decline more. Any past equity is no gone no longer what the owner attempts to do because the market value simply isn’t there anymore. Ask yourself the question, do I want to keep making payments on inflated, non-existent value or turn it back and force the mortgage industry and the banks to come to their senses and refinance based on current value? Should enough people simply turn back the property, the mortgage companies will be glutted with property they can’t sell and will have to do something with. This is the solution the common man can take to get something positive when the government and banks drag their feet and don’t want to solve this problem. Think about it and discuss it with your fellow homeowners.

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