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General -
Politics
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What is going to happen to all those homes and homeowners that are going through Foreclosures?
Florida, California, Arizona and Nevada are some of the hardest hit areas on home values and Foreclosures. These states were also heavily under new construction over the past ten years. So when the housing crises hit so did the employment industry in new home construction. These states are seeing home values drop 30% to 60%. When the government is encourages leniency during these horrible economic times people are deciding it makes financial since just to walk away from their home. Look at this scenario: Bob Smith bought a home 5 years ago at $300,000 with a 5 year ARM then a year later acquires another $50,000 second mortgage on the home. Now at present time Bob Smith home valued dropped like a rock and is only valued at $140,000 he is thinking screw it I'm walking away from this mess. Bob Smith decides to stop paying the mortgage it takes 90 days home foreclosure starts and approximately 90 more days to get kicked out of home. Back in the day Bob Smith would now be climbing out of bankruptcy which takes 10 years to clear from his credit report. During these times will your credit be destroyed the same as in the past? Will there be hundreds of thousands of couples with a blemished credit record for the next 10 years? Or will things be different in these harsh economic times. If these people like Bob Smith get away without getting their credit slammed for 10 years will this be fair for all the others that responsibly continued to pay their mortgage even though they are completely broke? How about the others that never considered the thought of leaving there homes because they were perfectly capable of paying for it but still took a $100,000 to $200,000 dollar loss? I think the government will intervene and help expedite these people out of bankruptcy to reestablish credit to encourage more spending to help kick start the economy, but only time will tell.
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