If you have no job, and your mortgage is worth more than your house, you will not pay your mortgage.
Why should you? The bank cannot take your house. What will they do with it? Will the bank pay the taxes, pay the insurance and keep up the maintenance? It is cheaper for the bank and the government to keep owners in their houses than take the houses back.
March 25 (Bloomberg) — More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report.
The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.
U.S. homeowners are struggling to make payments as depressed housing prices leave them owing more than their properties are worth. About 24 percent of properties with a mortgage were underwater in the fourth quarter, First American CoreLogic said last month. The median price of a U.S. home was $165,100 in February, down 28 percent from its peak in July 2006, according to the National Association of Realtors.
Today Obama is telling home owners that the banks will re-modify their loans. As though they could do anything different! The U.S. Banks and the U.S. Government created a real estate bubble so they could make immense profits.
Now, the entire country is paying the price.