Insta-Read: Know Your Foreclosure Facts
I rent my apartment. I’d LOVE to say it’s some kind of foreword kind of thinking that led me to make the decision to not purchase an actual place and instead just pay nearly a grand a month to my landlord because I saw evidence of the coming financial crisis … but really it’s just because there was no place within my “price range” to buy. But man, did I apparently luck out.
Every friend I know who owns their place, on the other hand, certainly does not currently feel lucky. All I’ve been hearing from them is countless complaints about the hardships of trying to sell, trying to make a profit, trying to raise rent on their tenants, etc. Now again, since I know zero about the housing market, in most cases I don’t care too much about this kind of topic. But the quick Q&A session about the foreclosure crisis over at AskMen.com is a pretty fascinating read, and worth giving the once-over to if you are, like my friends, mired in some financial troubles due to the housing bust. It answers a whole bunch of questions, many of which we didn’t even know WERE questions. For example:
So now that a moratorium has been declared on foreclosures, does that mean my house is free?
Er, no. The moratorium was voluntarily declared by certain lenders (JP Morgan Chase, Bank of America and Ally Financial, which was formerly GMAC). Others, like Wells Fargo and Citigroup, haven’t skipped a beat.
What about a national moratorium? Can’t President Obama help the little guy out and tell all banks to suspend foreclosure proceedings nationwide? Don’t count on it. Everybody from the right-leaning Wall Street Journal to the left-leaning Robert Reich (former Labor Secretary under President Clinton) has said that this would be a terrible idea. A national moratorium would only hurt the real estate market more. Firstly, a moratorium would prevent the market from hitting bottom, and secondly, it would prevent new sales of the properties that are currently being held by people who can’t make their payments.
So, don’t think you’re off the hook. Communicate with your lender on the possibility of modifying your loan or, if necessary, getting rid of your property in a short sale.
Me? I think I’m going to stick to renting until this mess is figured out.
About Rick Mosely Rick is the editor for TSB magazine.