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Bankruptcy

: Texas Lawyer Blog

Mortgage Crisis Continues

By mcbride

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A short article in The Economist entitled: ?Can?t Pay Won?t Pay? states that ?HOUSE prices in America have fallen so far that as many as one in five households have mortgage debt greater than the value of their homes.? Moreover, some of the defaults on mortgage loans is what the author calls ?strategic? meaning that the homeowner could pay the monthly amount due but chooses not to. ?New research* based on a survey of 1,000 homeowners suggests that one in four mortgage defaults are ?strategic??by people who could meet their payments but who choose not to.? In large part these are homeowners who have no equity in their homes and have no legal alternative to consider when deciding to just stop paying their monthly mortgage payment. Any efforts to amend the Bankruptcy Code to allow underwater homeowners to shrink the amount of the their loans to match the newly reduced values of their homes have failed. Here is a link to the entire article: http://www.economist.com/businessfinance/displaystory.cfm?story_id=13905502

Michael

Full post as published by Texas Lawyer Blog on July 13, 2009 (boomark / email).