The question was posed to me by Mark and Susan who I had the pleasure of meeting while previewing a home out in the central valley. An area so hard hit by the housing downturn that in most communities you will find home after home with neglected lawns and notices posted on the doors and windows of a recent foreclosure.
Mark and Susan are among the growing number of homeowners who go to sleep at night knowing that their home is under water. In the case of Mark and Susan they bought their home for $350,000 in 2006 and are now watching homes twice the size of theirs selling in the neighborhood for $150,000.
Frustration and reality for California homeowners
The frustration for Mark is knowing that the government is providing assistance to first time home buyers and people who have decided to stop making payments on their mortgage. “We did everything right and could just let our house go into foreclosure like most homeowners in our position but I can’t see myself doing that”.
Mark is referring to the growing number of homeowners opting to either walk away or in some cases buy another home at a lower price then simply stop making payments on the first home letting it go into foreclosure. Most of Mark and Susan’s neighbors have done exactly that and yet they continue to fight the temptation of following suit.
Mark also asked me how many homeowners were on the verge of default.
My response to Mark’s question was to share a statistic I recently read from the California Association of REALTORS showing the long run delinquency average of 4 percent increased to just under 9.2 percent. Foreclosure long run average was still relatively low at 5.2 percent.
9o percent of California mortgages were still being paid on time in the first quarter of 2009.
Mark was surprised when he heard this statistic but it was no real comfort to him knowing that his situation seemed hopeless.
Is there anyone out there who can help?
“Why doesn’t the government help homeowners like us who have done everything right?” asked mark. “Give us a tax credit or provide a little incentive or relief by allowing us to modify our rate, anything to reward us for doing the right thing”.
I shared statistics, talked about legislation regarding tax relief laws for foreclosed homeowners, and just listened.
At the end of our conversation I realized that I didn’t have the answer for Mark and Susan. All these nice people want is for someone to acknowledge their frustration and to let our legislators know they exist.
Mark and Susan are among the homeowners in this country who want to do the right thing.