Casualties of the Mortgage Crisis

You had money in the bank for emergencies, a retirement fund, and/or stock investments when you decided to purchase your home;
You had a great job, with a steady income when you decided to purchase your home;
You had great credit when you decided to purchase your home;
You purchased what you could afford, and not a penny more; and
You even paid your mortgage on time.

So if you did everything right when you purchased your home, why are you a casualty of the mortgage crisis? This is the question that many Americans are asking themselves as they follow the endless coverage of the declining housing market.

Homeowners who pay their mortgages on time are having the hardest time refinancing mainly because their homes have declined in value. Homeowners with adjustable rate mortgages are stuck in a never-ending adjustable rate cycle every six months. Homeowners with the infamous 80/20 loans are stuck with two mortgages, with the second mortgage representing the negative equity in their homes. And homeowner’s with prime loans who refinanced or purchased when the market was up, are now upside down.

Unfortunately, many of these homeowners with declining home values fail to meet the criteria for Obama’s Making Home Affordable Program (makinghomeaffordable.gov) simply because their mortgages are not held by Fannie Mae or Freddie Mac. So if you can’t refinance, the question is what should you do? There is no easy answer to this question. However, if you can still afford your home, despite the declining home values, you should probably continue to pay your mortgage. Although you are upside down, I urge you to hang on in hopes that Congress will remember you... the remaining casualties of the mortgage crisis. ORIGINALLY PUBLISHED ON Monday, August 17, 2009.