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St Louis Refinancing and Lending: Walking Then Renting Is New Way Of Living After Foreclosure
The “right to rent” might be somewhat of a short solution for many facing foreclosure thanks to a new congressional bill.
This in essence would allow families to possible stay in their foreclosed home as a renter for a 5-year lease.
The judge would then appoint an independent appraiser to set fair market rental value which would be allowed to rise with inflation.
Due to events leading to this new foreclosure epidemic, politicians and economists are now saying this bill would be necessary to help alleviate the rising housing inventory.
Other statistics show that foreclosures were up over 60 percent in the first three months of 2010 compared to numbers from the previous year.
But what is shocking is that reports say that close to 60 million home mortgages are more than 60 days late.
Since the grand bailout of all bailouts known as HAMP has completely failed, the “Right to Rent” proposal might be the one that makes most sense at this stage.
As far as income is concerned, banks will still get reliable rental monies, and families will be able to stay in their homes and at the same time significantly lower their monthly housing costs.
There will be eligibility requirements for this program. One is that homes would be limited to those bought at or below the median price for their statistical city area.
In addition, all St Louis home loan recipients had to have this address as their primary residence for no less than two years.
But no matter what programs are being introduced to ultimately prevent foreclosures, many homeowners are willing to walk away from their homes voluntarily.
In March 2010, strategic default or walk aways were at an all time high of 31 percent.
What is causing anger on Capitol Hill is that those walking away because of their home value being underwater could afford to continue paying their mortgage but have decided not to do so.
That startling number is up from 22 percent from March 2009.
Furthermore, this number increased by a whopping 24 percent when they learned that their neighbor did the very same thing or perhaps received a partial loan forgiveness.
A key deterrent to strategic default is the fear of losing a good credit score.
In fact, approximately 73 percent of consumers believe that keeping a good credit score is important and still an honorable goal to achieve and keep.
About the Author
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