Bay Area homeowners living mortgage-free
Many of the Bay Area homeowners can’t say for too long that they really own their condo. They bought the house with a mortgage loan, but they aren’t paying for it, so the auction is about to come. Some of them ended here as a result of the economic situation, they are unable to afford their mortgage and they are expecting the moment when someone comes and throws them out, if they can’t get a break from their bank. On the other part there are some opportunists out there, who don’t spend a dime on a house worth less than they owe. So they live in it, rent-free, until the new owner or the bank will force them to move out.
This new phenomenon is far more radical than the previous housing crashes, when the lenders moved very quickly. They could make the move in speed, since there were much fewer troubled loans; nowadays there are so many people with financial troubles that banks and lenders simply can’t keep up. This situation adds up to a continuous instability of the Bay Area housing market, because lenders move slowly and the homeowners endure uncertainty that could last for months.
"It’s bad all the way around, for the neighbor, the community, the city, state, nation. It’s continued indication that there are a lot of people in trouble particularly with their job situations" said Chris George, founder and CEO of San Ramon-based CMG Mortgage.
On the other hand, homeowner don’t have a much of a choice, they must ignore their mortgage. Jeff Dunking, a Bay Area homeowner has been employed only sporadically since past year, and the unemployment checks he’s collected just aren’t enough for covering the mortgage. "I stopped paying payments about 12 months ago" said the homeowner, who was rejected twice for loan modification on his condo. He is aware that many people think living mortgage-free sounds like a great deal, but this isn’t how he feels "It’s a lot of anxiety, a lot of stress," said Jeff Dunkin.
Posted by Istvan Fekete
on Aug 2 2010. Filed under Housing.
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