The Underwater Market

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The Underwater Market

Postby Buzzbox » Sun Dec 18, 2011 11:02 pm

These folks, at least a great deal of them, do not see the opportunity facing them. It’s a lot bigger market than the foreclosure group. These are homeowners who have and can continue to make the mortgage payments.

An example:
If they are paying $4,000.00 per month now for their existing home and they could buy a similar home with payments available at $2,500.00 per month nearby, they should proceed with the purchase, or even upgrade their housing if they are inclined that way. First they should buy the new home and a new car (if they are going to need one, and finance it, within the next couple of years) and walk away from their existing home. Their credit will be damaged for a couple of years but that shouldn’t be of much concern, if planned properly.

It makes absolutely no economic sense to stay in the existing home if they are financially capable of doing this.

It is the market that has created this situation, and it is no longer a moral issue but rather a financial one.

Why would any reasoning person think that the Banksters should benefit from homeowners paying off this market induced negative equity, at interest no less, for 10 or more years into the future. Remember, at the historical housing appreciation rate of 3.5% per year or so, it will take a very long time to overcome this negative position.

Given the above, how can the EHT be applied to help the homeowner move from the negative equity state and into a new home where their payments will be substantially less and their former negative equity situation eliminated?

I’m definitely thinking how this might be best accomplished, especially for markets that have been thoroughly trashed by value reductions exceeding 40%
G. David Hill (Dave)
Buzzbox
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Location: Mill Creek, Washington

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