Is the Bank Going To Repossess Your House?

Recent statistics suggest that before the year 2010 is done one million homes in the United States will be repossessed. This is a sad state of affairs caused by a combination of unemployment, the downturn in the economy, and discouraged homeowners walking away from real estate that is worth less than they owe on the mortgage. Banks are so overwhelmed by the sheer numbers of homeowners in arrears that they could foreclose on nearly five million homes, but they are not doing so because they do not have the time or manpower.
Many homes are now owned by the banks, but the real estate market is still dragging, so the homes cannot be sold whether by the bank or the homeowner. Many homeowners who have had their incomes reduced would like to sell but cannot. It is particularly painful to sell for less than one owes, especially when you need to come up with the difference in cash. Many hopeful home sellers are trying to negotiate short sales with their already overwhelmed banks in lieu of being foreclosed upon. A short sale can be advantageous to both the home seller and the bank, but the homeowner must prove they are distressed by being very delinquent in their payments with a foreclosure looming near. At the same time they must find a buyer who is patient enough to wait on the extra red tape that a short sale entails.
Some homeowners have decided to take the route of strategic foreclosure. It has been said that nearly a quarter of current foreclosures are of this type. The people who are having strategic foreclosures are letting the bank take the house by withholding house payments even when they can afford to pay. They are doing this because they do not see the sense in paying for something that is worth less than they owe. They are wrong about this, because what they are doing is equivalent to selling their stocks when the market value for them is down. If they would just hang on to their investment, their home, in just a few years their homes will be worth what they owe again. Some projections are that homes in the U.S. today will be worth double their value in twenty years. Also the strategic foreclosure is a bad idea because banks can tell rather easily that a foreclosure is strategic by pulling the consumer's credit report. If none of the other payments are delinquent they may think that the consumer has money. The former home owner will be sued for the difference between what they owed and what the home is eventually sold for plus fees.
In some circumstances, house repossession cannot be helped. There are many homeowners who are unemployed, under-employed and in economic distress. There are no easy answers for these people but to hope for that new job to be found, the economy to turn around, or for their house to sell for a good price. In the meanwhile they can always hope that the bank will be too slow to actually evict them out of their home.