It’s no secret that many people in America have faced foreclosure in recent years. In 2013, the number of foreclosures has dropped dramatically, leading many realtors to believe that the economy has changed and things are looking up. The only problem with this is that the number of unemployed continues to rise. Sure, the government says many people have returned to work, but the jobs being filled are low-paying minimum wage jobs. Some people have been forced to take one of these jobs because their unemployment insurance has run out and some have simply stopped looking for work altogether. So I don’t know how anyone could say that the economy is improving when the numbers tell a different story. If the numbers tell the real story, this is the calm before the storm and we can expect to see a lot of people file bankruptcy and lose their homes to foreclosure in the next year or two. This shadow inventory of homes that are in some stage of default or foreclosure now exceeds 5 million nationwide. I think banks are cracking down on foreclosure on these properties to prop up the value of the assets they own. If all of these hit the market at the same time, we would see the bottom of the housing market fall.
There has been a lot of uproar over the tax gulf and the expiration of the mortgage forgiveness tax that expired at the end of 2012. This means that people who lose their homes due to foreclosure will be liable to pay income tax for the deficit of his mortgage was foreclosed. This will put many Americans in a bad financial position to pay money they don’t have. This is why it has become common to see that people who lose their homes due to foreclosure will have to file bankruptcy as well to eliminate liability. Initially, most people file bankruptcy to stop foreclosure in the hope that they can settle with their lender. In some cases it works and in others it is better to hand it over and let it go. In our society, people believe that owning a home is a right. That became apparent in the early 2000s, when people making $ 50,000 a year bought houses for $ 600,000. In what world does this make any sense? The government put pressure on it and the banks took it and everyone knows how 2007 ended. All of these bad loans were bundled up and sold on the derivatives market. That set in motion a virtual collapse of the banking system in the United States that seeps into the world. After everyone thought we would learn from our mistakes, the same thing happens today. The only difference is that it is not real estate. Currently, since the banking crisis and the Fed has been printing money to buy mortgage-backed securities and bail out the banks. In other words, they are using Monopoly money to buy worthless paper. All of this is not going to end well when hyperinflation sets in and takes the housing market to record lows. It is not about whether it will happen, but when.
People living on the edge and close to foreclosure should really take a close look at their finances and what is going on financially. Nothing should be taken for granted in these dangerous times we live in. For those just barely getting by, take the time to consult a bankruptcy attorney and see if it’s time to pull the trigger. When it comes to filing for bankruptcy, timing is everything. Even if someone doesn’t need to apply now, they will at least have an education from the bankruptcy attorney on how the process works and what to do if they need it in the future.