A Review of Various Circumstances Warranting Foreclosure

Knowing when to Walk Away from the American Dream

No responsible person could ever imagine walking away from the American dream. Responsible home owners understand that a home is more than shelter; it is your comfort zone after a long day of work. Your home is your hiding place, when you simply need to be alone. Your home is your family's staycation[1] when a vacation is not an option. From birthdays to family bar-be-cue's on the 4th of July, your home is an integral part of your life where memories are formed everyday. And contrary to the popular saying, "home is where the heart is," our heart is where our home is. But suddenly you wake up one day and realize that owning a home in today's market is no longer where your heart is. Knowing when to walk away from the American dream is not a decision that responsible Americans take lightly, but it is a decision that many of us are facing.

You Are Officially House Poor

Being "house poor" is not a new concept. Professor Michael Stone coined the term "shelter poor" in the late 80's to define households that could not meet their needs for food, clothing, medical care and transportation at some minimum level of adequacy after paying for housing.[2] According to the U.S. Department of Housing and Urban Development, "the generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing.[3] The reality is that you are beyond house poor if your household is now paying 50% or more of your annual income toward housing costs.

Your Lender Refuses to Negotiate

For borrowers with piggyback loans or second mortgages, you may find that the process of negotiating with both of your lenders (or even the same lender holding both mortgages), is not only time consuming, but usually impossible.[4] However, your mortgage lender has various options when negotiating: READ FULL ARTICLE: A Review of Various Circumstances Warranting Foreclosure ORIGINALLY PUBLISHED ON Thursday, August 27, 2009