It is no surprise to South Florida homeowners that their properties have lost significant value over the last several years. Unfortunately, many individuals are debating about whether they should just walk away from their homes in order to rid themselves of a growing problem: underwater mortgages and unpaid debt. The national discussion on foreclosure has focused on individuals who have been so deeply affected by the economy that they can no longer continue to make their mortgage payments on time. Homeowners eventually get so far and they are forced to turn their homes over to banks.
However, many homeowners do not realize that foreclosure is not their only option. Florida homeowners may qualify to file personal bankruptcy in order to protect their homes while also consolidating unmanageable debt. A recent article published by the Sun-Sentinel may get more homeowners thinking about walking away from their homes, but homeowners should explore all of their options before making that decision. Bankruptcy may be a viable solution.
The Sun-Sentinel recently reported that 2005 and 2006 were the worst years for individuals to purchase a home in South Florida. In retrospect, 2005 and 2006 was the worst time for individuals to buy a home since the Great Depression. During that period, thousands of homes peaked in value and were sold to buyers who had to pay little money down in order to finance the purchase. Since then, the housing market crashed, home values have declined and homeowners lost equity in their homes. Now homeowners owe more on their mortgages than what their homes are worth, many have lost their jobs or a significant amount of their income and homeowners are finding it to be impossible to refinance or sell. Thousands have defaulted on their mortgages or are on the brink of defaulting as a result of the economy’s downturn.
Analysts expect that home values will continue to decrease, leaving more Florida homeowners with underwater mortgages. So what can homeowners do? Later this week, we will discuss exactly how much value homes have lost in South Florida and how homeowners may want to consider bankruptcy in order to avoid foreclosure and losing their homes.
Source
Sun Sentinel: “Homes bought five years ago the hardest to sell,” Paul Owers, 6 Mar. 2011