Fiduciary Responsibility

The effect of the Recession or Depression depending upon which region of the US that you reside has been well documented. Many of my friends and colleagues have been directly impacted by job loss and an imploding housing market. The sad reality is that many people have lost 30-50% of the value on their homes. No fault of their own, they followed the so-called American dream. As responsible homeowners, they paid their mortgages dutifully and made sure that they did not purchase more home than they could afford. That is the unspoken rule that your monthly mortgage should be no more than 1/3rd of monthly income.

After doing what was correct, many folks are conflicted.

Some have resorted to just walking away from their mortgages, after all these loans are secured instruments which use only the property as collateral. Moreover, some folks believe that due to a failing economy, lenders will later 'overlook' their indiscretions. Perhaps the conversation would go, "So you're claiming bankruptcy and you've foreclosed on your home?" , the reply , "Yes I have. " The credit lender would reply, "Oh yeah 2009 CY, everybody was doing that then. Special circumstances, we'll forgive you." How likely is that scenario? Heh, don't believe the hype. That sort of stuff never works out the way you might envision it. Particularly for people of color. Unfortunately, in a Capitalist society, good credit is your only saving grace. Business deals are best done leveraging other folks money in a strategic and smart fashion.

There are a few ways to combat the depressed housing market. I might add that these strategies are not full proof, but they are options. If you own a Fannie Mac property, you can take advantage of the gov't led program. You can also request that your mortgage be modified; particularly if you have been paying on time.

One more word on some of these programs which help people avoid foreclosure.
The Obama campaign has created the making homeAffordable effort. While is quite noble and probably helpful, I have learned that it may not be totally enforceable. As an investor, it does appear that the banks appraising properties that they suspect do not meet the 125% Loan-to-Value. This is a very foul policy as it defeats the spirit of the Obama program. So once again, the banks win? Well, maybe not. My approach is to be aggressive and empower myself with knowledge. Lastly, I will continue to live a frugal lifestyle and live below my means whenever possible. Coupons and receipt reconciliations are my favorite past times.

Hold your head up and be encouraged.

Related articles by Zemanta

• Those Who Walk Away (meganmcardle.theatlantic.com)
• How long will a foreclosure or bankruptcy affect credit? (seattletimes.nwsource.com)